Insurance Brokers release new findings and visit Queen’s Park for annual Awareness Day
April 4, 2012 – (Toronto, Ontario), The Insurance Brokers Association of Ontario (IBAO) released new findings today and is urging Ontario Members of Provincial Parliament (MPP) to ban the use of credit scoring on personal property insurance. Currently, a growing number of insurers are using a person’s credit score to measure their insured risk. This has led to an increase in insurance premiums or a denial of insurance outright to many Ontario citizens.
The IBAO conducted a scientific province-wide poll on credit scoring in February, 2012 comparing it with a similar poll taken in November, 2010. The results indicate that 78% of Ontarians were not aware that insurers were using their credit scores to price their home insurance. Furthermore, 74% of Ontarians were in favour of extending the ban in auto insurance to home insurance.
These results are nearly identical to the last time the poll was taken. This indicates that insurers who use credit to increase rates have failed completely to inform their customers despite a voluntary industry code of conduct which says consumers should be informed and must consent.
“Unfortunately, since our last poll results were released nearly a year-and-a-half ago, insurers and the Ontario government have done little to deal with this issue,” stated IBAO President Rick Orr. “Clearly, insurers cannot be counted on to inform and protect its customers on the matter of credit scoring. That is why the Ontario government must step in and ban this practice that is hurting consumers.”
Further poll findings reveal that MPPs that support a ban will be rewarded at the ballot box as 81% of Ontarians want their MPPs to ban the use of credit scores to determine their home insurance rate and 35% of Ontarians would be more likely to vote for their MPP if they supported a ban.
In 2005, the Ontario government banned the practice of using credit scoring as it relates to auto insurance policies because a person’s credit score was not related to their insured risk and therefore the practice was deemed to be unfair and not in the public interest. Ontario insurance brokers are at Queen’s Park today once again urging the Ontario government to extend the ban to home insurance.
In May 2011 the IBAO launched a consumer educational website, www.SoaringInsuranceRates.ca as part of the association’s public consumer protection campaign. Since the launch, more than 12,000 concerned Ontarians have logged on to educate themselves with many signing the on-line petition and sending informational letters to their MPP.
“The use of credit scoring to price home and other personal property insurance is hurting our consumers,” added Orr. “It affects those who can least afford it: retired seniors, newcomers to Canada, the unemployed, single income families and small business owners utilizing lines of credit. The IBAO believes the practice is unfair to consumers, not transparent and inappropriate as a rating tool. We are calling on the Ontario government to act now and ban this practice entirely.”
About The Insurance Brokers Association of Ontario
The Insurance Brokers Association of Ontario (IBAO) is a ‘not for profit’ association that represents and serves the interests of over 12,000 independent Property & Casualty Insurance Brokers in the Province of Ontario. For information about IBAO, visit www.ibao.org or www.ibao.org/blog to receive timely news and information updates. You can also follow IBAO on Twitter or join the IBAO Facebook Fan Page.Tags: Insurance Brokers Association of Ontario (IBAO)