How do insurance companies use credit history?
Insurers can use your credit history to underwrite your insurance policy or to rate your insurance policy. Underwriting is a process where an insurance company gathers information and decides whether or not to insure you. In Maine, an insurer may not deny, cancel or refuse to renew your auto or homeowners policy based solely on your credit information. In other words, if the insurer would not normally deny, cancel or refuse to renew your policy without the credit information, then the insurer may not use the credit information against you. Rating is a process that determines how much you will pay for insurance. Many insurers charge higher premiums based on various parts of an individual’s credit history, some of which are described in question 6. In Maine, an insurer may not base your renewal rates solely on credit information; other applicable rating elements must also be taken into consideration. Rating elements include your claims, vehicles and drivers insured, coverage and location
