Recently I received a letter from my home insurance company:
Thank you for being a Gore Mutual customer.
We're working hard to ensure that our products are competitive. And we want to provide you with the most accurate, personalized pricing possible. That's why we're introducing personal credit scoring with our property insurance products.
We would like to give you the opportunity to receive a discounted rate by providing us with your credit score. This type of soft credit check is 100% optional and will not impact your credit rating or alter your credit score. If you choose not to share your credit history with us, or if you share the information and your credit history isn't strong, we guarantee not to raise your rate or change your coverage. You just won't be eligible for the available discounts.
Rest assured, we'll never raise your rates because of your credit score. But it could help save you money!
The security of your information is our top priority. We have security measures in place to keep your inform safe and ensure that we're compliant with PIPEDA, BC PIPA and all credit reporting legislation.
The consent form says:
BY SIGNING BELOW, I AUTHORIZE Gore Mutual to collect, use and disclose personal information provided by me in order to obtain a consumer report (also known as a "personal credit report") from a consumer reporting agency; I ACKNOWLEDGE that the credit score will be used by Gore Mutual, along with other information I have provided, in connection with my personal property insurance for the purpose of:
- Generating a premium for insurance
- Determining my eligibility for a discount in the premium that will be charged for my personal property insurance
I, THE INSURED, UNDERSTAND that Gore Mutual cannot refuse to offer me an insurance policy on the basis of my refusal to consent to a credit check, however, if I do not provide my consent, I may not qualify for Gore Mutual's best rate.
I UNDERSTAND that my consent will be valid for as long as I have a policy in effect with Gore Mutual, unless withdrawn earlier.
I'm suspicious, though, of their rationale for offering a better rate for better credit scores. Insurance premiums are always paid in advance, so clearly they're not concerned about non-payment. Are they betting that rich clients can afford to absorb minor casualties and won't bother to make small claims? But then they would choose plans with higher deductibles, right? So what else could be the justification?