January 21, 2011
By: Carrie Van Brunt
Oregon insurance policyholders have saved almost a million dollars since the state law mandating credit score reviews went into effect last year, the Department of Consumer and Business Services said yesterday.
Though there has been some controversy over the practice, Oregon allows insurance companies to consider a customer's credit score when calculating their initial premiums. If they do so, however, the state now requires that they allow consumers to ask for their rates to be revised if their credit scores improve, the department said.
Moreover, insurers are not allowed to adjust rates upward if a policyholder's credit rating has slipped, according to the department, making the rate revision a more or less risk-free process for consumers.
One of the lawmakers behind the new rule, state Senator Suzanne Bonamici, said it has been a success.
"The law is working as intended and people who have improved their credit profiles are being rewarded with better rates," she said.
The policy also applies to auto insurance customers, the department said, and customers who get their home and auto coverage through two different firms may need to ask both for a review if they notice their credit ratings have improved significantly.
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