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Law protects against discriminatory usage of credit score information in car insurance hikes

Anne Hoffman/Delaware Public Media

Gov. John Carney signed a bill into law Tuesday aimed at helping protect Delawareans against predatory car and home insurance practices.

State Insurance Commissioner Trinidad Navarro says he heard from many Delawareans while on the campaign trail – and since taking office – about being targeted by insurance providers simply because they lost a job or got divorced.


Groups like the NAACP wanted to remove insurance companies’ abilities to use credit scores and age increases altogether from factors they use to calculate rate increases.

Navarro says senior citizens were particularly outspoken on the issue.


“We were getting information particularly from our older population that their insurance rates were going up simply because they were getting older, not because they had received tickets or were driving more miles, bought a new Lamborghini," Navarro said.

He says the new law was originally modeled after a California law completely prohibiting use of credit scores in the equation insurance companies use to determine rate increases.

“We did our research and found in many cases, that the use of credit score is discriminatory in nature," Navarro said.

But, he says there was significant pushback from the local insurance industry.

“They brought in experts from all over the country – they brought in lobbyists, lawyers…it was kind of comical that they had all of these experts and we had a local agent named Joe.”

Navarro says the result was a compromise that prohibits insurance companies from using credit scores that include information like income, gender, sexual orientation, zip code, race, ethnic group, nationality, religion and other factors.

And - for those who don’t have credit scores at all - that factor won’t be used against them.

Under the law, companies also won’t be able to increase rates because of a change in marital status due to the death of a spouse – or solely because an individual turns 75.


According to Navarro's office, around 60% of the private passenger auto insurance market in Delaware is in support of the law.  

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