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Utah lawmakers allow limited use of credit histories

Utah joined a growing number of states seeking to regulate insurers' use of credit histories when lawmakers passed a bill to prevent insurers from using a person's credit report to charge higher auto premiums.

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Utah lawmakers passed a much watered-down version of House Bill 110 that allows insurers to use credit-related scores in the initial underwriting of auto insurance, but only if other risk-related factors are also considered. Additionally, the law allows the scores to be used only to give customers discounts, not raise their rates.

According to a study by Conning & Co., more than 90 percent of auto insurance companies and an increasing number of home insurers use your credit information, filtered through a formula to create an "insurance risk score," to determine how likely you are to file a claim on an insurance policy. More than half of those insurers use that information to determine how much to charge you in premiums. Read How your credit history affects your auto and home insurance premiums.

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