Credit-Based Insurance Scoring
Patrick F. O’Leary; Randy R. Richards; Thomas J. Quinlan, Jr.

Abstract
Insurance industry advocates and consumer critics have sparred over using credit-based information to rate personal lines insurance. Yet consumer knowledge, attitudes, and opinions on the subject remain largely unexamined. This study surveyed over 1200 Iowa consumers on their knowledge of the practice, their beliefs about its efficacy, and the fairness of its use. We discovered that consumers are generally uninformed or misinformed about credit-based insurance scores generally and are not convinced that credit scores are valid predictors of the tendency to file insurance claims. Further, they believe that using credit information to determine insurance eligibility and rates is unfair.

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