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Emergency order in WA suspends use of credit score to set insurance rates for 3 years

Washington Insurance Commissioner Mike Kreidler has issued an emergency order preventing companies from using your credit score to increase your home and auto insurance. The order will remain in place for three years after the pandemic is declared over.

Kreidler said his decision was necessary since current temporary federal protections that placed a temporary hold on the reporting of certain negative credit information will end 120 days after the president declares an end to the coronavirus pandemic national emergency.

Washington Insurance Commissioner Mike Kreidler poses for a photo Feb. 8, 2017, in his office at the Capitol in Olympia.
Credit Ted S. Warren / The Associated Press file
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The Associated Press file
Washington Insurance Commissioner Mike Kreidler poses for a photo Feb. 8, 2017, in his office at the Capitol in Olympia.

“The insurance industry’s dependency on the discriminatory practice of credit scoring has always been unfair,” Kreidler said in a written statement. “But given that the federal protections from plummeting credit scores could end soon, we need to take action now to protect the public.”

Kara Klotz, a spokeswoman for the Officer of the Insurance Commissioner, said a lot of people are in a tough situation right now. And having a credit score used against them only makes things worse.
“People who have less than perfect credit scores can pay up to 80 percent more for insurance than the same person with a better credit score,” she explained. “And so, it’s not fair for them to pay more for the same insurance as someone else because they lost their job because of the pandemic.”

Beyond that, she says, the practice is inherently flawed.   

“We got stories from countless people, and we posted them on our website – you know, people who weren’t even driving because they didn’t have a job, and their auto insurance went up because their credit score went down,” Klotz said. “That doesn’t make any sense.”

Klotz said this emergency order provides three years of protection from the use of credit scores when they are buying or renewing car, home or renter’s insurance. It gives people time to get back on their feet without worrying about skyrocketing rates, she said.

Kreidler wants to ban the practice altogether, but a bill that would do that stalled in the Legislature.

The Associated Press contributed to this report.

Paula is a former host, reporter and producer who retired from KNKX in 2021. She joined the station in 1989 as All Things Considered host and covered the Law and Justice beat for 15 years. Paula grew up in Idaho and, prior to KNKX, worked in public radio and television in Boise, San Francisco and upstate New York.