House and Senate Democrats are asking insurance companies how they use credit scores in setting rates, noting particular concerns as climate-related wildfires and severe weather affect premiums.
Senate Banking, Housing and Urban Affairs ranking member Elizabeth Warren (D-Mass.) and Rep. Ayanna Pressley (D-Mass.) led 18 colleagues in questioning six insurance companies: USAA, State Farm, Progressive, Liberty Mutual, Farmers and Allstate.
The lawmakers accused the insurers of using homeowners’ credit history to spike rates — something banned in three states. The Democrats said the practice is “particularly concerning” as insurance rates skyrocket, in part due to worsening natural disasters caused by climate change.
They also said insurers have at times tried to justify rate hikes by nodding to climate-related disasters alone — and in doing so, have concealed the role that other financial factors, like integrating credit scores, have played in rate decisions.
