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Washington State Credit Ban Confusion

By February 11, 2022Insurance

As you know the Washington State Insurance Commissioner, Mike Kreidler, issued an emergency rule that banned the use of credit scoring for all insurance companies back in June of 2021.  This initially meant that anyone with good credit would see a rate increase when their insurance came up for renewal. When those renewals came, we heard from many of you the increases it was causing. This was very difficult not only for us as your insurance agents (since we dread hearing your rates are going up) but just as hard for you, the consumers. No one wants to pay more money, and no one wants to shop their rates when they already have an awesome agent. 

Well skip forward to October, this ban was dropped as the courts found there was no justification for the credit ban. Yay! So, over the course of the last few months insurance carriers have been taking credit into consideration again when determining premiums. Insureds would then be seeing a decrease in their next renewals. So, we thought. 

Effective March 4th, 2022, Mike Kreidler has adopted a new rule prohibiting insurers from using credit scoring to set rates for auto, homeowners and renter’s insurance for three years or after the end of the pandemic related federal and state emergency financial protections, whichever is longer.  Kreidler’s office said it started the process of implementing a permanent rule after the emergency rule the commissioner issued last year was struck down by the courts. 

This will again impact many. It will add costs to people on fixed incomes, like the elderly who have benefited from reduced insurance rates because of their good credit scores. Many will not see a higher income, but they will likely see higher insurance rates. 

What we are hearing: Many insurance carriers are not happy with this new ban and do plan on starting another lawsuit to get this ban struck out of court as well. 

What this means for you: In the meantime, this will go in effect on 3/4/22. DO NOT JUMP SHIP. Is there a possibility your rates will go up? Yes! Do we think this ban is going to be permanent? No! Our advice is to remain with your current carrier until we find out if this is going to be permanent. Switching carriers can have an impact on your insurance score, your longevity and your discounts. If you decide you want us to requote with our more than 25 carrier options, we are happy to review the best options with you as well.   We work with many carriers including Allstate, PEMCO, Travelers, Progressive and more.

Please call us if you have any questions, we are here to help.