The use of credit scores and insurance has been an on going debate for decades. When I started in the industry back in the 90's, credit was not being used in Michigan. At one point the company that I was with began using credit to determine rates, but it was simply a rating of Acceptable or Not Acceptable. Their research apparently showed that people that had filed bankruptcy were that much more likely to file claims and not pay their bills one time (causes additional expenses). For those that were "Unacceptable" they paid a slightly higher rate. Those of us out in the field working with the public were mixed on the use of credit. I understood their rationale and moved on as it only affected a small percentage of the people I quoted and when it did affect them, the increase was tolerable.
After a couple of years a new "algorithm" was introduced to more accurately price the policies. Each customer was given a number between 1 and 16 for this financial score. It was a secret formula and credit was supposedly only a small part of the formula. As we started quoting we soon found out that the price could TRIPLE from a 1 to a 16! In sales a referral is the best prospect that we can work with. I soon found myself not asking for referrals as I didn't want my customer talking to anyone. One of my first referrals under this "algorithm" was my customers next door neighbor. The home was identical and the cars were similar, but the rate was TRIPLE. I had "accepted" the initial scoring method that penalized bankruptcies with a slightly higher price, but I was now seeing rates TRIPLE and the reason was a company secret that I was not able to explain to anyone.
Each company had their own "algorithm" and they each had figured out how to price insurance. Obviously none of them had it figured out. It feels that with each year another factor is added to the insurance equation and it is getting more and more complicated. Is insurance that complicated? Can any of the companies truly determine exactly who is going to have the next accident?
Once again, politicians are talking about lowering insurance rates. This "talk" has been going on for decades. I recommend shopping for insurance every 3-5 years. Even if something in Lansing eventually gets passed to lower insurance costs, you still owe it to yourself to make sure that you have checked other companies to make sure you have the best rate for your household scenario.