homeowners insurance and credit check

[rayvyn]

I'm in Tennessee.

My homeowners insurance was increased by $200 this year because they did a credit check on myself and my exhusband who is still listed on the policy( he refuses to allow me to buy him out and his credit is beyond bad). I was not notified that they were going to do this, they have not done this in the past, and we have been with them for 9 years and only have turned in two claims, ( a fall requiring stitches and a fallen tree) both were less than $500. They are now saying that they do a credit check for all new policyholders (per their letter to me) and because "our" credit is bad...they have increased what we need to pay them. Can they legally do a credit check without my permission? Do they not have to notify me before doing this? Does anyone who wants to know my credit history have the right to access it? Can I legally get the insurance placed in my name since I am the only one paying it and have my ex dropped?? Can anyone help??

Rayvyn

 

[ALawyer]

Contact your state insurance department and ask.

My sense is probably "yes" they can underwrite and/or set premium on the basis of credit scores, as I understand that poor credit has been shown to be a major indicator of poor claim experience -- it turns out that folks who are careless with credit are as a group statistically more likely than those who are credit-careful to be more careless with caring for their property (such as allowing hazards to go uncorrected) and driving too. That is not to say you, or any one specific person with poor credit is less careful, only that as a group those with good credit tend to be more careful.

But after 9 years you do have a track record. And using poor credit to jack up rates can be a lame excuse, or a backdoor effort to improperly discriminate. Thus contact your state insurance department and ask if your state permit this. And consider contacting your state representatives if you feel legislation should ban the practice.