Claims News Service, June 27, 11:10 a.m. EDT -- ConsumerReports, a magazine published independently by the non-profitcompany Consumer Union, recently released an investigative reporton the use of credit scores by insurers. The magazine's researchfound that scores and their uses vary among insurers and thatcredit-based insurance scoring could cost many drivers hundreds ofextra dollars, even if they have never been in an at-faultaccident.

According to the report, few insurers routinely disclose scoresor what role they play in setting premiums. Consumer Reports soughtand obtained scoring models filed with regulators in Florida,Michigan, and Texas used by nine of the 10 largest U.S. autoinsurers and found that there are no standards. Each company usesdifferent models and weighs different credit-report information.Some big companies find scoring useful only for new customers, notrenewals, while others may use it for both. Moreover, CR notes thatthe credit data from which the scores are derived have a reputationfor being inaccurate and out of date. Despite such problems, moststates allow insurance scoring.

Advocates from Consumers Union have urged legislators andregulators in several states to ban the use of credit scoring tounderwrite homeowners' and auto insurance policies. Those effortshave met with opposition from insurers. Legislation to end creditscoring in Colorado, Delaware, and Minnesota has failed thisyear.