Proposed Bill Would Curb Unfair Insurance Practices

Three members of the U.S. House of Representatives have proposed a new bill that would put an end to a form unfair and discriminatory scoring that insurance companies use against lower-income customers.

Credit-based insurance scoring has become the norm for a number of auto insurance companies in 47 states and the District of Columbia for more than a decade now. The practice consists of insurance companies quoting higher rates to individuals who have filed for bankruptcy, sought out new lines of credit, or closed in on their debt limit, according to Claims Journal.

Supporters of insurance scoring point to studies that have suggested a connection between poor financial histories and a tendency to file more, and larger, insurance claims. However, critics of the method argue that it is fundamentally flawed in that it makes insurance bills larger for lower-income families who may already be laboring to pay their insurance bills on time already.

Because attempts for a state-level ban on insurance scoring have not been very successful (only Massachusetts has had success getting the method banned by enforcing an existing regulatory ban), there are no guarantees that the bill will have much success in the House or Senate on a federal level.

If you or a loved one has fallen victim to an insurance company’s unfair practices, there may be legal options at your disposal. Call Sokolove Law today to learn more about pursuing a bad faith lawsuit. For legal help, call (800) 581-6358.

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