The American Property Casualty Insurance Association took issue with Root Insurance Company’s mission to have credit-based insurance pricing outlawed across the country, either state-by-state or by federal fiat. Jessica Hanna, senior vice president public affairs, APCIA, said such a prohibition would remove from use a factor that gives consumers choices when buying their auto insurance.

“The U.S. auto insurance marketplace is characterized by intense competition and the announcement by Root Insurance provides an example of the wide range of options that drivers have when it comes to purchasing auto insurance,” said Hanna.

“APCIA supports giving insurance customers choice, convenience, and flexibility in managing their insurance. The fact that not all companies use the same underwriting and rating factors means consumers are free to choose among companies that can meet their needs and budget. A one-size-fits-all approach to auto insurance pricing or underwriting is neither workable nor beneficial for consumers.

“To successfully compete in the marketplace, insurers consider underwriting criteria that enhance their ability to accurately assess risk. By using the most accurate underwriting and rating tools available, such as credit-based insurance scores and many other factors, insurers are able to more accurately predict which consumers are less likely to have an accident or file a claim. This helps safe drivers pay less for insurance.

“For companies using credit-based insurance scores, it is important to note that they are thoroughly regulated at the federal and state levels, and most drivers receive a discount in the price they pay for insurance.”

Members of APCIA, the primary national trade association for home, auto and business insurers, represent all sizes of insurers. Hanna added, “The auto insurance industry serves the driving public well by providing a highly competitive and pro-consumer marketplace that gives consumers many options to choose from.

“If you do not like your quote or the cost of your insurance, you can always shop around for a better price, and we encourage consumers to do so.”

Hanna pointed out that many states have addressed special circumstances that may temporarily affect an individual’s credit score with statutory consumer protections. “Now more than ever, families need extra help if the unthinkable happens like death of a spouse, loss of a job or even a pandemic. That is why 25 states have adopted a model law which enables insurers to assist consumers with exceptions for those facing extraordinary life circumstances. Policyholders just need to communicate with their agent or company.”