RICHMOND — Insurance companies look at many factors
when determining whether to issue a policy and how much that policy will cost. Whether
shopping for homeowners or auto insurance, many people may not realize that their
use of credit may affect how much they pay for insurance or whether they can even
In Virginia and many other states, insurance companies may use a person’s credit
information in the insurance underwriting and rating process. Some insurance companies
may charge higher premiums or refuse to issue a new insurance policy solely on the
basis of unfavorable credit information.
However, insurers in Virginia may not nonrenew existing policies solely on the basis
of your credit information. Virginia law requires that any time your insurance company
takes an adverse action based on your credit information, it must tell you the reason
for its decision or advise you that you have the right to obtain the reason. An
adverse action includes not receiving the insurance company’s most favorable rate
or having the insurance coverage denied or terminated as a result of your credit
information. Ask your insurance company if your credit information was used to underwrite
and rate your policy and how this affected your policy.
The Bureau reminds consumers to check their credit reports periodically for accuracy
and to report any errors to the credit reporting company to have them corrected.
To obtain a free copy of your credit report, visit
call 1-877-322-8228. Under federal law, consumers are entitled to obtain a free
credit report once every 12 months from each of the three nationwide consumer credit
reporting companies – Equifax, Experian and TransUnion.
For additional information about how your credit information can affect your insurance
policy, contact your insurance company or agent. The Bureau of Insurance can answer
questions about insurance coverage for your home, auto or any other insurance-related
questions you may have. It also offers numerous free publications about various
insurance-related topics including a brochure that explores the impact of credit
on your auto and homeowners insurance. For additional information, contact the Bureau
toll-free at 1-877-310-6560 or by email at
visit its website at www.scc.virginia.gov/boi.