Most Ontario consumers don’t realize their credit score can impact what they pay for home insurance.
That is why the Insurance Brokers Association of Ontario (IBAO) has launched a consumer website www.SoaringInsuranceRates.ca to educate Ontarians on the use of credit scoring in home and other personal property insurance.
IBAO reports a growing number of insurers are using a person’s credit score to measure their insured risk on personal property insurance. This has led to an increase in insurance premiums or a denial of insurance outright to many Ontario citizens.
The use of credit scoring impacts consumers who can least afford it. Most affected are newcomers to Canada, the unemployed, single income families and small business owners utilizing lines of credit. IBAO believes the use of credit scoring is not in the public interest as the practice is unfair to consumers, is not transparent, and is inappropriate as a rating tool.
What can you do if your insurance has increased significantly?
Talk to your Insurer. If your insurance rates have increased significantly call your insurer and ask why.
If the increase is a result of the use of credit scoring check your credit report to ensure there are no inaccuracies which could be impacting your credit score.
Your credit report can be obtained from Equifax and TransUnion , the two major credit reporting agencies in Canada. Both allow you to check your credit record for free by mail. It is recommended you check with both agencies as each is an independent body and may have different information about you on file. As well, the Financial Consumer Agency of Canada provides a great guide to Understanding Your Credit Report and Credit Score.
Even if your rates have not increased
Even if your home or personal property insurance has not increased we encourage you to:
- visit www.SoaringInsuranceRates.ca to educate yourself on this issue;
- sign the online petition to stop the use of personal credit scores by insurers in Ontario; and
- use the IBAO website's interactive online form to send a personalized letter to your MPP today!