Home, auto insurance fairness bill becomes law

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Gov. John Carney signed into law a consumer bill that targets practices used by automobile and homeowners insurance companies to determine premium costs.

A substitute to the original HB 80, HS 1 for HB 80 represents a compromise between the Department of Insurance, legislators and several industry members.

Under the bill:

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  • Insurance companies may not use an insurance credit score that uses income, gender, sexual orientation, gender identity, education, address, zip code, race, ethnic group, religion, marital status or nationality of the consumer as a factor.
  • Insurance companies may not cancel or non-renew a policy based on credit information alone.
  • Insurance companies may not take action against a consumer because that person lacks a credit card or lacks credit information.
  • Insurance companies cannot utilize collection information using medical codes.
  • Insurance companies cannot utilize extraordinary life circumstances such as
  • serious illness or injury, death of a spouse or loved one, divorce, and involuntary loss of employment for three (3) months or more.
  • HS 1 for HB 80 continues Delaware’s prohibition on using credit in policy renewals, unless a review request results in lower premiums.
  • An insurer cannot increase a renewal rate for personal automobile insurance policies based solely on an insured attaining the age of 75 or older.
  • An insurer cannot increase rates based upon a change of marital status due to the death of a spouse.

The legislation had bipartian sponsorship.

“As head of the State’s top consumer protection agency, my priority is and always will be to level the playing field by standing up for Delaware consumers,” stated Navarro. “Insurance rates should be fair. However, as I have seen over the past several years, they are far from fair. By addressing unfair discriminatory practices, HS 1 for HB 80 adds and enhances Delaware’s consumer protection measures to hold companies accountable. This law will push Delaware in the right direction toward a fairer and more affordable insurance marketplace. I thank Governor Carney and the legislature for recognizing the importance of this legislation and enacting it into law.”

HS 1 for HB 80 passed the House on June 15, 2017, with 24 yes and 14 no votes. The bill passed its final floor vote in the Senate on June 27, 2017, with 20 yes and 1 no votes.

Some within the insurance industry warned the bil would force an overall increase in rates, since underwriters have fewer options in offering discounts. Delaware is also a small state and more regulatory restrictions could lead some companies to leave the market

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