From the Office of State Senator John Whitmire
For Immediate Release
Friday, May 31, 2002
Contact: Lara Wendler, (512) 463-0115
Allstate's use of Credit Scoring a New Low in Insurance
Houston, Texas -- In response to Allstate Insurance Company's plan to use credit ratings as a qualification for insurance, Senator Whitmire stated, "We all know it is hell to be poor, but Allstate Insurance has taken it to a new low, it is now hell to have poor credit."
"Under Allstate's new criteria for insuring, millions of Texans would not be eligible for homeowners insurance," stated Whitmire. "Often poor credit has nothing to do with a person's ability or intention to pay their insurance premium. Rather, it is often a result of a past financial difficulty that may include divorce, illness, flood, or other unfortunate events."
"Allstate admitted that they are getting ahead of future regulations, but, in my opinion, they are ensuring the Legislature will take action," stated Whitmire. "Unless they reconsider their decision to base insurance on credit ratings, I will aggressively attack this new business practice next session and will ensure that it is prohibited by law."
"Allstate's policy has the appearance and similar harsh reality of redlining and other biased and prejudicial tactics that consumers have fought for years," said Whitmire. "We enacted laws to stop redlining in the insurance industry and we will pass laws to ban the use of credit scores in determining eligibility or setting insurance premiums."
"Insurance eligibility should be based on fact and ability to pay, not on a broad brush such as credit rating." Whitmire stated emphatically, "Allstate hasn't heard the last of this."