Michigan High Court Will Hear Credit Scoring Case

May 13, 2009

According to report by the Associated Press, the Michigan Supreme Court will consider whether insurance companies can use customers' credit scores to set home and auto insurance premiums. The high court issued an order Thursday setting oral arguments for October.

The state insurance commissioner in 2005 banned credit-based insurance rates after calling the practice unfair, discriminatory and unreliable. A Barry County judge blocked the ban. But the Michigan Court of Appeals reversed the ruling in 2008.

Most large insurers in Michigan use some form of credit scoring to give premium discounts. Generally, the better one's credit score, the lower a customer's insurance premium will be.

Insurers are still using credit scores pending the outcome of the appeal to the Supreme Court, repoprted the AP.