Insurers Have Opportunity To Define Terms Of Loss History Database Debate Hard markets create political backlash.
Certain legislators will always seek a “villain” when insurance premiums rise. When it comes to auto and homeowners coverage, insurers who use credit-based insurance scores and electronic loss histories to underwrite their policies make a convenient bad guy.
During the initial stages of the debate over the use of insurance scores, the political rhetoric was heated and insurers response was perceived as defensive. Gradually, however, the tone of the debate became more rational and most states that took action in 2002 to regulate the use of insurance scores enacted compromises. The compromises established reasonable consumer safeguards while allowing companies to continue to utilize this effective underwriting tool.
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