Massachusetts Bans Use Of Credit Report By Insurers

Every major auto insurer in the United States looks at a person's credit report before setting their premiums. The roundabout logic is that people with bad credit are risky drivers. Massachusetts recently enacted a law forbidding the practice.

The law was signed by Governor Deval Patrick last week. The state had been banning the practice as an administrative rule, but codifying a law makes the ban stronger. ''We want to commend the legislature and the Patrick Administration for their leadership and support on this important issue,'' commented Frank Mancini, President and CEO of Massachusetts Association of Insurance Agents. Massachusetts also bans the use of education level and income as determining factors in auto insurance premiums.

Massachusetts has the strictest laws regulating what information can and cannot be used to assess insurance premiums. The state should be one of fifty that prohibit credit scoring by insurance companies.

By: Gina Quarrles

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This is certainly good news for many MA drivers, up to 25% of whom suffer with bad credit. It is recommended that all motorists request a car insurance quote online from a variety of insurers before moving forward with a new or different policy.