The insurance industry in Washington touts a commitment to racial and financial equity, yet it continues to use the discriminatory practice of credit scores to determine the premiums you pay for several types of coverage.

What does your credit score have to do with how you drive your car or maintain your property? When asked, insurance industry representatives say the score predicts who will file a claim in the future. They contend a credit score is blind to race and income.

Their arguments are deceptive, and this practice must end. That is why I have proposed legislation to ban the use of credit scores for insurance in Washington.

My office recently worked with the Consumer Federation of America to analyze how major national insurers in our state penalize consumers with low credit scores versus those with higher scores. Consumers with low scores pay an average of 79% more annually despite all other factors being equal.

The disparity is even worse where communities have greater populations of minorities. The Lakewood region is a prime example. With one national company, safe drivers with a low credit score pay nearly $800 more annually than those with higher scores just for the minimum-required auto insurance.

A growing number of insurance agents have written to me about the unfairness of the penalties imposed on consumers with lower credit scores. 


One agent shared a common refrain: “This practice is a loophole to charge higher rates and not a reliable indicator of likelihood to file a claim, as some insurers allege.”

Said another: “Insurance companies have every right to charge higher rates due to bad driving habits. But it is immoral and unethical to charge higher rates due to things that are beyond the driver’s control.”

One of the major factors in how much premium you will pay depends on a proprietary formula the insurance industry develops — a secret calculation you cannot see.  

Most people expect to see their insurance rates increase if they cause an accident, get convicted of drunken driving, or file a claim after damage to their home.

But what does losing your job or opting for no-interest financing for furniture or a car have to do with how you drive or take care of your property?

Your premium should be determined the way most people assume it is — by how you drive and how you treat your property.


The industry is booking record profits during this pandemic and will again try to scare you: Credit scoring will increase premiums. Competition will vanish. They will also cruelly contend credit scores reflect a “personal lifestyle choice.

Getting laid off or hit with a serious illness are choices people never crave or choose.

Retreaded scare tactics belie the industry’s professed commitment to equity. In July, I invited CEOs of insurers doing business here to discuss my proposal and the steps we can take to benefit consumers.

I am still waiting to hear back.

I last proposed a credit score ban to the Legislature in January 2010. The industry opposed it then, and the bill never passed. A hearing on this year’s bill is scheduled for Jan. 14 in the Senate Business, Financial Services & Trade Committee.

More than 200,000 state residents have lost jobs during the pandemic. Many have seen their incomes plummet. Through no fault of their own, their credit scores will take a negative hit despite a temporary federal protection. It will take years for many to recover.

Insurers and other institutions used to segregate our populations by race and income. It was called redlining. As a society, we did the right thing and banned it nationally in 1968 through the Fair Housing Act.

Today, the insurance industry equivalent of redlining is credit scoring. The time has come for decisive action to end this longtime structural inequity that penalizes so many in our state.