INSURANCE COMPANIES THAT DO NOT CHECK CREDIT SCORES
There are a growing number of insurance companies that do not use credit scores when determining policy premiums. These companies recognize that credit scores may not be a fair or accurate representation of a person’s ability to be a responsible driver or homeowner. In fact, research has shown that the use of credit scores as a factor in insurance pricing may result in economic discrimination against lower-income individuals and minorities, who may have lower credit scores due to systemic issues beyond their control. Luckily there are currently four states in which state laws ban insurance companies from factoring credit when determining car insurance rates:
All insurance companies from the aforementioned states and a few from other states do not use credit scores to determine policy premiums.
Here are some insurance companies that do not use credit scores in determining policy premiums:
- Root Insurance: Root Insurance offers auto insurance policies to drivers in over 34 states. It was founded in 2015. The company has its headquarters in the District of Columbia. The company does not use credit scores when determining policy prices. Instead, it uses a smartphone app to track a driver’s behavior on the road, such as how often they brake abruptly or accelerate quickly. The app also considers factors such as the type of car being insured and the driver’s age and driving history.
- MetroMile Inc. : MetroMile is another company offering auto insurance policies that do not use credit scores. It is a San Francisco-based technology startup that offers pay-per-mile car insurance, licenses a digital insurance platform to insurance companies around the world, and provides a digitally native offering featuring smart driving features, automated claims, and vehicle information . Meaning that , drivers are only charged for the miles they drive each month and they are monitored digitally.
- Lemonade Insurance Inc. : Lemonade offers renters’ insurance, homeowners’ insurance, car insurance, pet insurance and term life insurance in the United States without the use of credit scores to determine policy premiums. Instead, the company uses artificial intelligence and machine learning to analyze a variety of factors, such as the location and age of the home, the type of construction, and the presence of safety features like smoke detectors. Lemonade also donates any unclaimed premiums to charitable causes chosen by its customers.
- The Hartford: The Hartford is a company that offers auto and home insurance policies without using credit scores. Instead, the company takes into account factors such as the age and model of the car being insured, the driver’s history of accidents and violations, and the location and type of home being insured. There are many insurance companies that do not use credit scores in determining policy premiums. These companies recognize that credit scores may not always be a fair or accurate representation of a person’s ability to be a responsible driver or homeowner.