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The following is presented as part of The Columbian’s Opinion content, which offers a point of view in order to provoke thought and debate of civic issues. Opinions represent the viewpoint of the author. Unsigned editorials represent the consensus opinion of The Columbian’s editorial board, which operates independently of the news department.
News / Opinion / Columns

Rep. Vick: Who is causing rate increases?

By Rep. Brandon Vick
Published: September 5, 2021, 6:01am

If you’ve noticed any of your insurance bills have gone up, you’re not alone. If you haven’t seen such an increase, you probably will the next time your insurance policies renew. Some have seen rates increase by hundreds of dollars per year, even though their coverage hasn’t increased, and they haven’t filed any claims.

So, what’s causing rates to skyrocket for drivers, renters and homeowners?

The question isn’t “what?” It’s “who?” And the answer is Washington State Insurance Commissioner Mike Kreidler, who, entirely on his own authority, without any public input or process, issued an “emergency rule” that required every insurance company writing personal lines of property and casualty insurance in Washington to refile new rate plans for home, auto, renters, and other policies. His ruling means those new rate plans can no longer consider a consumer’s credit history in any way.

Insurers have long considered credit information to help predict the likelihood that an insured person will suffer a loss at some point in the future. Consistently, studies have proven a direct link between credit history and insurance claims.

Like 46 other states in the nation, Washington regulates but does not prohibit the use of credit information as one of many factors in rating and underwriting insurance. Insurance Commissioner Kreidler has been trying to ban the practice, despite his own acknowledgment there is a correlation between credit and risk of insurance loss.

In January, Kreidler requested a bill banning the use of credit-based insurance scores. As the Ranking Republican Member of the House Consumer Protection & Business Committee, I opposed a ban and took a different approach.

Unfortunately, while my committee gave my bill (House Bill 1351) unanimous approval, the bill didn’t pass out of the House. It may still be considered in 2022.

Meanwhile, Kreidler’s bill, Senate Bill 5010, was amended to replace the ban idea with something better: a proposal that would have only allowed insurers to consider credit information if it reduced the premium paid by the consumer.

Kreidler opposed both bills. When lawmakers chose not to pass his bill, he ignored the will of the Legislature and 20 years of existing state public policy. He issued his rule and forced every insurer, in just weeks, to rewrite and refile all their rating plans or stop writing home, auto, renters and other lines of personal insurance, completely aware of the costly impact this would have on tens of thousands of Washingtonians.

Despite that, he glibly referred to this monumental disruption in Washington’s insurance market as a “good time to shop for coverage.” That’s kind of like saying the flu is a great way to lose weight, or the loss of your home to a fire is the right time to buy a new house.

A ban on the use of credit information is a bad idea. Ignoring the will of the Legislature and abusing the power of office to make your own law — without public process or input — is even worse. But for many Washington insurance consumers, what really matters is the higher bill when their policies renew this year. If your rates went up, blame Commissioner Kreidler. If you want to do something about it, tell the commissioner how upset you are and then contact your legislators.

Rep. Brandon Vick, R-Vancouver, is a state representative from the 18th District.