Almost every large cncadaian home insurere is losing money. premiums have not gone up much over the years, but home values, rebuild costs, etc have gone up substantially...not too mention some of the storms in the last 10 years.

how is losing money "greed"...were not tlaking just one or two companies here either...do your research!!!

here's a question

what's your profesion? how have market conditions changed what you do for a living? how has it affected your customers?

I work in an automotive garage, new technology has forced us back to school and forced the shop to upgrade on some expensive equitment, which in turn gets passed along to car owners. shop rates have risen from $50/hour to $120/hour. come see me and complain about that if you want. If we could use credit score to determine the likeliness of who's gonna pay and who's gonna stiff us we would, and would charge accordingly based on that info.

In response to "Matthew T", why do you assume because someone disagrees with the CBC that they automatically work for an insurance company? I think I actually dislike people like you more then insurance companies themselves. Just because you have an issue with insurance doesn't mean we all should. But then again my insurance hasn't gone up so I'm happy.

You know what I wish? I wish that people working for the insurance companies would stop posting fake comments on this videos' comment board under fake names. I'm talking to you "Bob" and "John" and "Jack" and "Kay." Enough of the crap.

I have had the same problem with cooperators group insurance through the company I work for. We swithed to them last summer to lower our insurance. We get the statement for this year and our house insurance went form $1500 to $3200 a year. When we checked in to it I was told it went up because of my credit rating is bad. They told me that i verbally approved it, which I do not remember. When i had my credit rating checked there is nothing wrong with it. I called them back and told them they made a mistake and possibly got the wrong person they said if it was a mistake it will only drop it 10%. We switched back to our previous company and they quoted us the original $1500 for house insurance.

I was going to skip the remarks made by Terry but cannot. Terry after many insurance companies making lots of cash over the last few years including Cooperators who managed a profit in 2008 & 2009 this credit scoring was not needed or necessary. The current measures were fine. Also these studies you talk about. Where are they? Oh that's right none of the parties involved would do an interview including the normally open Cooperators. Why is that? Aren't they proud of increasing premiums by 100 % in a single year for some clients regardless of claims? Tell me this Terry. How much did someone's rate go down pre credit reporting vs now with a good credit record? If it had been the same percentages as what they went updor those with less than stellar credit I am sure someone would have been happy to go on Camera. Instead they spin out a public smoke and mirrors letter on their website

This is way too big of a topic for a mere 15 minute spot on a 30 minute show (less than 23 minutes without commercials.) CBC states that the Co-operators declined an interview. Of course they would!

Let's say the Co-operators did do an on-camera interview. Out of the 15 minutes you gave the whole story, how much time would you actually have dedicated to the interview with someone from The Co-operators? 4, maybe 5 minutes, tops? The actual taped interview would have been much longer, but edited to suit the title of this episode: "Rate Hike OUTRAGE". There would not have been time to properly address the issue, nor would it even have been the right forum to do so.

And your response to the Co-operators open letter to you, was weak. Most notibaly, you stated that "I should also be clear that it was not Ms. Mesley, but one of the consumers in our story who referred to insurance company

I read the letter response from CBC Marketplace. Can't say I agree with the stance. How do we know what the research process is that you took. You interviewed a man who has been unemployed for over 2 years and a single father, no other insights as to why their insurance went up. There could be some hidden reasons such as the condition of the properties, lying about prior claims or credit issues. If the pilot who made the comment about the insurance bailout was incorrect why on earth did you broadcast it when you knew it was misleading? I'm not a fan of insurance companies but seriously your article was overly one-sided and why on earth would you go to the broker's association, likely because they could use your broadcast as a marketing tool to make themselves look like a socially responsible party. I'd venture no one took an interview for a reason and not to hide anything

Regarding your letter sent to the cooperators;

what a pile that is! the insurance industry was portrayed in a negative way on your show, and now you deny it? Simply quoting what was said doesnt show the context it was said in. Cooperators and the other companys portrayed on your show were made out to be money gouging criminals, and, although you appear to be supporting them in your rebutal letter, the impression made by the show was that you were against them.

So answer this market place, who's side on you on? do you or do you not agree with credit scoring on home insurance? do you or do you not agree with the studies done showing the correlation between a persons CS and claims? and do you even agknowledge the fact that there are other factors affecting peoples premiums, and will you ever do a report on those factors giving people the REAL story?

Jamie...you are right the broker could not have seen the score. Actually he could not have seen the score at all even with permission to do the check.It is my understanding that insurance companies have banded discounts depending on the number generated behind the scnes so to speak. The score is never revealed to the staff at brokerages or offices of Cooperators. With respect to the pilot he was probably told the rate without the score and then agreed to it resulting in the 200 dollar difference.

Ben - I congratualate you on coming out with the info as you have. Of all the companies, cooperators, who was founded by a group of farmers having difficulty with insurance should have found a better way to deal with increasing costs. By the comments here it is affecting a large number of their customers and the fact they didn't make a comemnt tells me they don't care.

I have had my home insured with the Cooperators for 15 years. Not once did I ever file a "claim". I was outraged when I received notification that my insurance went from $54.00 a month to $89.00. I feel I along with many others are being "scrutinized" and almost punished for having a good rapport with this company. I have always paid my premiums and now, well let's just say I am in the market for a better and more reasonable premium. I am currently seeking quotes from other companies who will most likely be more reasonable. P.S. Thanks Cooperators for the wrench you have thrown in my spokes after my years of choosing you as my provider. One would think that being "claim free" would have some kind of rewards! Thanks for nothing but a kick in the butt!!!

It is a shame that CBC highlights a company like Cooperators for their open practices with the public. Previous to the Cooperators publicly announcing their new strategy to underwrite using credit score, very few consumers were aware that over half of insurers are already using it.

I can almost guarantee that in the next few years, every home insurer will be using credit score. The companys that are not using credit score today will find that in the next few years they will have an influx of clients with lower credit scores and ,as statistically proven, more frequent and larger claims.

"What a great concept, pay your bills on time and recieve reduced rates". I think we all know who would argue with that statement.......

If you work for an insurance company and are defending this please put your hands up. ...LOL

Sorry about that...you say you wanted a two sided story, but when one side will not talk to you how can you have that. None of the parties involved wanted to talk to Marketplace. Why is that?. One can assume the so called facts used to justify the large increases by some people are up for debate and they figure by burying their head in the sand it will go away. When I insured my home my agent came to the house, looked at it and all seemed good, well maintained. Rather than complaining about the tactics used maybe as an employee of the Cooperators you should push them for better disclosure of the numbers and the correlation they claim. Otherwise the tactics used are no different than the tactics used to get info on anyone else. If you have nothing to hide there should be no reason to complain.

This show was not journalism, it was sensationalism. Wendy had a predetermined agenda, and the facts were irrelevant. As an insurer, we never see the client's actual credit score; it translates to a rating factor to preserve client confidentiality. Many of our clients are seeing a decrease due to credit score - which is a bonus for good financial responsibility. We also share information on how clients can improve their credit score to help them lower their rates. CBC and Wendy - you should be ashamed of this show.

We stopped using the Personal Group over a year ago because of their poor customer service, credit bureau hits and rate structures. Watch your auto insurance with these characters, you could do another full program on how they come up with their rates on this business line.

Why would any insurance company agree to have an on air discussion with CBC on this topic when Wendy has already made up her mind that credit scoring is negative and will lead the interview in that direction.

I was appalled by the mis-representation of facts in this seqment and CBC should be ashamed of themselves. I am an Aviva customer and the Pilot's understanding is not correct. Perhaps he should call his insurance broker again? My broker explained it to me that he cannot get the discount amount because that would mean that his broker would be able to see his personal credit score. That would be against the privacy act. Also, does CBC know the differene between a soft and hard credit hit? Insurance companies do soft checks that do not impact someone's credit score.

You really need to do some more fact checking on your stories before airing them. Your credit score story, was very inaccurate, with many details missing.

I am really disappointed in CBC, and can honestly say that I don't plan on watching your news broadcasts anymore, as how can you be trusted?!

To all the pro-insurance people... Exactly where has "Credit Scoring" been CLEARLY proven as an indicator of claims? Who compiled the stats? Was it from an independent third party source? When were these stats procured? In the segment and on these comment boards I keep hearing about these phantom statistics but they're never produced. Also, I keep reading about how the segment was sooo one-sided, yet every Insurance Co. that was offered a chance to give their side of the story refused to do so. Why is that?

87% of Canadians (see we can use statistics too) think this is a morally reprehensible practice and the elected govt. of entire provinces are actually banning the practice, yet some "people" (ie. insurance company executives/employees) still seem to think it’s an ok practice. This seems to be nothing but a cash-grab.

And for the record, "Greed is NOT good!"

After reading some of the comments on this topic I cannot believe the ignorance of some people...no one reads before they sign or listen when they are asked the question. Credit checks, or soft hits, cannot be done unless consent has been given! Cry foul about the privacy law all you want, at one point or another you consented to the check. And about the rising cost of insurance, well let's rate this way... everyone will pay the same premium, regardless of area, type of location, amount of risk, rise in building costs, etc. And at the end of the year, after the tally of all the claims that were submitted are held against the premiums taken in, who will be the first to complain when a claim cannot be honored because of lack of reserve from the improper collection of premiums?? The insured! First learn how insurance works before raising the pitch forks! From a broker/consumer.

What did you expect when government allowed banks into the insurance business - when there were the four pillars of finance - the bank, the trust company, the insurance company and the credit unions it did, for some unknown reason, keep things a little more honest. Now, just look around and it's easy to see than either the ethics and morals of business have gone to the moon or "rape the people,and get their bucks," is the new game to play. I would suggest that the actual profits be listed for anything attached to insurance, by all companies. The $$$ will shock the heck right out of you. It's common practice to beat the wages of the employees down while scooping outrages profits. Check on TD Bank for one and of course there is Ing, woops, I mean Intact. Go on, be brave, check it out, then let the government boys stand amazed and just not understaning how it could happen.

your credit score has nothing to do with whether or not you are employed, it's about whether or not you pay your bills on time. If you have a bad credit score for some reason work to improve it and you will receive a discount just like everyone else who has managed to pay their bills on time. Stat's show that around 85% of canadians have a good credit rating and would have a positive impact if their insurance rates where based on credit score.
Marketplaces expose was riddled with misinformation and out right lies. As a largly publicly funded broadcaster I expect more from cbc then I do other news sources - clearly I am expecting to much!

Shame on you CBC Marketplace. If you had done your research correctly you would see that the story you ran had half-truths and incorrect information. Firstly, The Co-operators was one of the only companies that was open and transparent about their use of credit score. They posted material on their website and sent various commmunications to their clients. Also, talking about an "insurance company bailout" was totally incorrect. You should know that any bailout happened in the United States, not Canada. You should check out the article that The Co-operators posted on their website that clearly provides correct information that you should have done when you reported this story.

I bet Cooperators will be striking back harshly at CBC for that article not because it was unfair, because it was poorly researched. Get your act together CBC.

I have a good credit score, and have worked hard all my life to get it there, and keep it there.
Why shouldn't I have better rates compared to someone who can't pay their bills?
I've never had to make a claim, because I can repair things myself, or hire someone - because I can afford to.
I know of someone down the street who is a great person, but doesn't make good financial choices - and you can tell by looking at the home, the roof is in need of repair, garage door is bent and broken etc.
This person would have to make a claim almost every time something goes wrong, therefore the credit score story holds water.

I noticed my rates go down this year, due to my credit score. Guess the reporters didn't feel like interviewing anyone who pays their bills on time and has good credit.

I, too, work for an insurance company and we do not use credit scores to underwrite. We do not even check the credit. There have been all sorts of misinformation on the reason for higher rates. The truth is these are the factors:
*The insurance company can invest your premium and use the interest/investment income as profits and if the market is doing well, your premium will likely not be increased or may even go down.
*The whole point of insurance is "spreading the risk". This means that the money is pooled to pay claims. More claims or more cost to pay out claims means higher premiums.
*Insurance Companies must buy insurance as well. This is called re-insurance. When the claim exceeds a certain limit, the re-insurance kicks in and pays. Re-insurance rates have gone up across the board. The lower the loss ratio, the less that rate went up.

I used to be a very big fan of Marketplace...But your show last Friday on Credit Scoring and Bashing the Co-operators Insurance Company - made me very mad.....I was outraged that you did not investigate this further and your evesdropping on a Co-operators employee while their client was on the phone with them was very disturbing....I'm quite sure they did not know on the other end of the phone... I personally do not agree with Credit Scoring but you made it out that all Co-operators employees are criminals and that my friends is not fair....I have been a employee of Co-operators for over 25 years and felt this was a very one sided story.....I truly think you should have investigated this further.

My home insurance jumped 40% last month, reason was that some homes made sewer backup claims. I never made a claim, excellent credit rating etc... I canceled my home insurance and saved 100%. I am willing to take the risk, my home is mortgage free, down with greedy insurance company's!

ok here are a couple of things you should all understand, first off insurance isn't the only item that has gone up recently.....wages,groceries, everything has been going up. What? Insurance isn't supposed to ever go up but your wages are...get real. With the cost of replacing everything you insure going up and the wages of everyone doing the work going up of course insurance will go up. Also Everyone looks at the credit score like some big scary monster..well it's not. The credit score is a glimpse into the financial stability of an individual. Does it not make sense that an individual who can afford to look after there house will have less claims? People need to stop complaining and come to terms with the fact credit has seeped its way into every aspect of life...you dont complain about telus using it to determine if you can make your payments.... continued in next comment

An Insurance company is assuming a huge financial risk taking you as a client. Your building, all your contents, and liability. Assuming HUGE $$$$ on your behalf. In fact, add up what they are assuming and it is more then any creditor you currently have.

You dont think they have a right to know how you handle your finances? You dont think it makes sense that how you handle your finances is a direct relation to how you maintain your home?

I work in the finance industry. There is no relation between income and credit score. None!

Ethic! Do you know the definition of ethic? As journalist, your duty is to present all the facts, not only those which will validate your profound desire to provoque and get high BBM scores. Your show on credit score did not present all the truth to your viewers and you perfectly know it! CBC is a public television owned by all Canadians. We have the right to expect more honesty and integrity from you. My house burned completely a couple of years ago. I was very happy to get the financial support from my insurance company to rebuild and get my life back. An insurance company has to be financially strong in order to help us when we need it the most. When will you have the honesty and the courage to present the other side of the story? Probably never because the truth is not «sexy» enough!

Jive:
1) investment losses - insurance companies can only invest in the safest of investments (legally) and must keep a certain amount of money aside to pay claims. Investment income keeps your premiums DOWN because the company doesn't have to depend solely on premium income and underwriting profits.

2)Poor credit translates to poorer upkeep of the home so that means in a windstorm, if your roof is due for replacement and you haven't because you don't have the money or usually the interest to do so, damage occurs and a claim is submitted. My bills are paid on time, my house is kept in very good condition, so why should my premiums go to pay for your sloppy housekeeping, poorly kept house and unpaid bills?

Richard--the former consumer lender: I am assuming you are not an Actuary. Therefore I don't think you are qualified to make the statement that there is no correlation between credit score and insurance risk. You are, however, allowed to use the word "correlation." (Good job, Rich!)

Ben--Co-operators employee: One missed credit card payment would not result in a bad credit score.

The Internet. It lets too many people complain about things they know nothing about.

I am glad to have the advantage of being on both sides of this situation. This vantage provides me, along with a few other fellow insurance collegues, the opportunity to see how clearly Marketplace goes for shock value instead of providing consumers with information that will help them make correctly informed decisions.

Insurance companies don't speak on-air to shows like Marketplace because they know anything that's said will be turned to the negative. It's a lose-lose situation.

There are so many factors involved in how an insurance company makes money that it's naive to think it's simply by introducing a new factor to the rate structure. Similarly, there are so many factors involved in determining whether a client is a good or bad risk that it's elementary to impact a client's rate substantially based simply on their credit score.

I don't believe credit scoring should be used to set insurance rates for social reasons. However, everyone must accept that credit scores are one of the most accurate predictors of claims because it's the truth. It's been studied to death and trying to deny the truth of this will only undermine the real argument. The broker guy interviewed was correct.It's about affordability and availability. Insurance serves a social purpose by keeping people who suffered a disaster from becoming dependant upon the charity of others or the state. Blackballing people with low credit scores undermines this purpose.

Why was my earlier comment not posted in which i had asked what the government can do about it. Regulate the insurance companies so they do not have access to your credit scores.
Why did the moderator did not post my earlier comment. Why not regulate the insurance industry and make legislation against just a suggestion. May be the insurance companies and political establishment are all terrified when you speak the words reform.

My premiums with The Cooperators went up from 600 to 1200/yr. Home insurance, no claims EVER. Reason: My credit score is low. Yes, I have had difficulties due reduced income two years ago, and though I continued to pay my bills, I was late twice in the course of one year. Now I make the same amount of money I made in 2008. I still do not drink, smoke, do drugs, get involve in risky activities, etc. In addition, I pay my insurance premiums yearly (not monthly) so nobody finances my insurance cost but me. So where is the risk???? Even if I go bankrupt right this minute, the insurance company will not lose the already paid premiums. And I can guarantee you that if my roof collapses because I have no money to do the regular maintenance in my home, I will not be getting any money from the insurance company, because of my negligence. So where is the risk???

Since I missed the program when it was aired last week, I tried to watch it on line.
But for some reason the Adobe Flash Player does not reproduce it properly. The sound and picture are very jumpy, which makes it impossible to watch.
Since I have 4 browsers on my computer: IE8, Opera 10.51, Maxthon 2 and Firefox 3.6.3 I had the same results on all of them.
Afterwards I clicked on an earlier program and this one reproduced properly.
Perhaps you can have this looked into, and have this problem corrected.

Thanks.

I worked for an insurance company for 13 years and now worked as a mortgage broker. The statement I want to make is - Credit Score is a measurement of how well you pay your financial obligation. The number is fluid. It changes whenever you apply for credit, be it a car loan, mortgage, department store loan, new credit cards etc. If you carry large balance relative to your limit it will reduce the score. It also depends on when the lenders report to the credit bureau.

It doesn't have any correlation to an insurance risk. To have insurance coverage, you need to pay the consideration (premium). So if you have bad credit and can't afford to pay the premium, you will have no coverage. My opinion is credit score shouldn't be used as a rating vehicle.

"2. By what standard, statistic, calculation, benchmark, does my credit score affect my home's possibility of getting flooded... damaged in any way shape or form?"

Umm.. the direct correlation between credit score and avg. # of claims per person. Yea. THAT STATISTIC... did you even listen to the program???

Chances are that if you're tight on cash, and you're roof needs repair, you'll pay your insurance deductible to get it fixed rather than pay for it out of pocket (because that would cost more). That's just one example.

One thing worth considering in light of all this is that if insurers use credit score to rate, paying your premiums should increase your credit score. That would be a FAIR tradeoff for consumers.

The online video doesn't work.

"1. Why do must I subsidize investment losses of insurance companies? It is not my fault they invested, poorly, MY money for their own gain, nor was I asked to share the profits when they were raking millions."

You are not subsidizing them: YOU ARE PAYING THE MARKET PRICE. Technically, only the government subsidizes anyone.
The companies didn't make bad investments, it's just that there were very few good investments. Which is why most insurance companies have had to start really managing their risks by underwriting policies more strictly and charging higher premiums. The cost of doing business for insurers has gone up markedly. That's the market right now. Deal with it.

They took the risk, not you. Since they took the risk, they get the profit. By giving them your money you aren't risking anything. You're not standing to gain or lose anything, hence, no risk.

First: people need to educate themselves a little about how insurance works in most of the country. It's a for profit industry, not a charity. Insurance is not a right. If you don't want to pay for it, don't buy it.

Further, there is a strong, direct correlation between two sets of data (here it's credit and # of insurance claims). Please don't compare using credit rating to something like racial profiling or gender discrimination. Seriously. Credit rating is a marking of "financial responsiblity", and if financial institutions cannot use it, then what's the point?

i get a discount too ;)

Buyers...read what you sign.

Well, if we are going to jack up people's insurance rates based on statistics which suggest that their credit score indicates a possible claim in the future then we should throw in jail people that come from abusive families just in case as the statistics show that those people are more likely to commit a crime in the future.

I work for the Co-operators. It's true there are people who are upset with us using their credit score, but most are okay with it. Diligent homeowners are informed and understand why - increases for everyone no matter what the risk, or appropriate premium for the risk -based on about 10 different factors. Should someone with a state-of-the art brand new home pay the same premium as another homeowner with a 75-year-old home with outdated wiring, etc? Why is it okay to have your credit checked for a $50 cell phone and not for your $350,000 house, with another $350,000 worth of personal property? I highly doubt anyone has paid $700,000 worth of premium in their life times.

I see the logic behind it. Poor credit scores reflect people who may increase the amount of a claim due to "Mysterious Disappearance".
I know people who have inflated their claims saying that 200 CD's went missing from their car, sunglasses, etc. This is one way of weeding out these possibilities. It isn't 100% exact science, but it is probably a pretty good place to start.

Lastly, for the people that disapprove for them to increase rates due to poor credit, how about instead they just get denied for insurance after a credit check. Nobody seems to complain if people with low credit get denied for a car loan, mortgage, or any other credit dependant risk.

I am disappointed my coment has been sensored without having any profane or rude content.

I will repeat: why had the Financial Service Commission of Ontario or FSCO not been contact for their coment? FSCO regulates insurance in the province of Ontario - Where the two clients featured live.

While I appreciate the work that you people do I am a little disheartened by the timing of this broadcast (5 years after credit score was implimented) but not as disheartened by YOU of all organizations not seeking out the public organization that regualtes insurance for the province of Ontario and deleting my coment asking about it, and informing your watchers of it.

One may be left to wonder if the leads and broadcasting interests are limited to the scams and products the producers of the show have witnessed or fallen victim to and investigated to the end of their own satisfaction.

Wendy needs to do a little more research. Your credit score is not based on your total income, it's about paying your bills on time, every month. So losing your job won't send your insurance rates soaring, as Wendy would have you believe. It's about responsibility. Someone making $40K can have a better credit score than a person earning double that amount if he/she pays monthly bills on time. Credit scoring doesn't discriminate based on wealth - rich people with jobs can have crappy credit scores, too. I expected more balanced coverage from our national broadcaster. This was nothing more than fear mongering to get the story.

I think it's funny that consumers get angry at a insurance company who - should anything go wrong in a home fire/theft or car accident will reinburse you for hundreds of thousands to possibly millions of dollars to check if you're a responsible client but don't think twice about letting big box companies do it to get a 15% discount in a store or for a fancy new cell phone. They're on the hook for a lost less risk!!
Think about it people.

Hi, I'm so happy that you did a segment on Bloomex. I'm a florist and have known of the poor quality of Bloomex and other similar companies for a long time. Glad that now the general public can see what they are. Order takers that don't have a clue.If you want quality call a Real Florist,with a store front and street address!!! Thank you Marketplace.Great job!!!!!!

Certain financial/credit elementshave a direct correlation to loss history(both frequency and severity). It is such a good indicator that most insurance companies would use it for auto in Ontario if they could.(They do in the U.S.A.)

Remember that insurance companies are in the business of predicting potential loss...and in order to do that we use statistics based on past experiences. Just like young males are more likely to be involved in an automobile accident, clients with lower insurance scores(which uses some elements of a credit/financial element) are more likely to have a claim, or have a higher claim amount than clients with higher aggregate scores.

I work for an insurer and know that the data is compelling linking credit scores and future claims.

That said, it is outrageous to apply these methodologies to existing customers who have clean claims and payment histories. That's what Co-operators has been doing along with several other insurers. It is not an honourable way to treat existing customers.

Several large insurers are trying to dump existing clients off their books.

So it is news that homeowners with a lousy credit score are a poorer insurance risk than someone with a good credit score? duhh.

The whole privacy thing is interesting, this goes beyond just insurance in my opinion.

Typical of a newscast (especially CBC) to air one side of a storey. If not who would listen. T
Credit score is a part of life in almost everything we do. Banks, phone companies, home fuel delivery, or any other financial transaction we do. Why would insurance companies be any different.
When you sign an insurance application you give permission for them to order reports on yourself. Read it before you sign it.
What the show does not tell us is that more than 80% of population benefit from a credt check. In other words they get a discount for an acceptable credit score. If prior experience is used to determine rate why not credit if it is an indicator of future loss expectancy??
Come on Marketplace.. check the facts before you air something

You can't do anything these days without credit, including renting a movie. Insurance is based on statistics, and this is just another statistic that is used. If those whose credit plummeted when they lost their jobs would have invested in some better financial planning when they were employed, they may not be in this position.
Maybe we should just charge a flat rate for insurance, use no statistic at all, and whether you have a 600 sqft bungalow or 5000 sq foot home, the premium should be the same. Lets say $1million a year? Get real.

Credit scores are important in setting rates for insurance b. The story failed, however, to note something else. The lack of a credit score is also a factor in setting insurance rates. In fact no credit score is taken to mean the same thing as a very bad credit score. Insurance companies will not say exactly how bad but I calculate that no score equals a credit score of about 400 (on the scale of 300 to 900).

I was put into this exact position this spring by Cooperators. I have a hard-to-insure-at-any-time B&B. My premium rose from about $3K annually to more than $7K annually (monthly rise to $622 from $279). Nothing about my situation had changed since last year -- except, apparently, a credit check. Yeah, our score's not great -- my partner's lapse into clinical depression some years ago (and HIS insurer's refusal to pay out on his disability policy) really decimated our finances. It's been a long slogging climb out of that mess, and money is still a big issue -- but we manage to pay our bills with only a few glitches here and there. The proposed 120% increase in household insurance threatened to toss us straight back into the mud. I'm happy to say that, in the frantic search for a way out, we managed to get insurance at $2K annually -- 2/3s of what Cooperators USED to find acceptable.

I love you lady's, the show and it's clear you enjoy very much what taking people to task..I know that change happens very slowly barring "mob rules" action perhaps that's problem My question is, is there a legal way for the common man sitting on the sidelines to help expedite some change?

I guess the little geek,creep that discovered this little loop hole was probably given a rather health stock option.

Keep up the good work

Cheers
dr

RE: Credit Score

The defence for using credit score is that it accurately reflects risk. This statement is accepted by both sides and the argument shifts to topics such as privacy or consent.

Let's shift the dynamic for a second though; pretend that single mothers, or aboriginal canadians or some other identifible was shown to be more likely to make a claim! This practice would be shut down quicker than you could say despicable.

The use of credit score is wrong and the practice should be halted and rate increases based on credit revoked.

thank you for an excellent show

Cooperators also hiked my home insurance. When I called they informed me that I lived in an area that came within a high risk area regarding flooding. How do I deal with that? I have no knowledge of neighbours or such having these problems. What do we do ??

It isn't fair to bring up AIG, which is mainly an American insurer, and compare it to the co-operators. The co-operators is almost exclusively Canadian and was not a part of any BAILOUT...

I have to say, this scandalous piece of journalism is so clearly out to lunch on the details and the whole nature of what an insurer does and how it is done, it's shameful. If that context were added, it would change everything.

Further: what this segment demonstrates ever more to me is that consumers are not blithely unaware of what's going on with the products they buy because they are willfully deceived by big bad companies, but because they are too indifferent to actually read over signed documents and dig into things. The government should protect us from deceitful practices, ABSOLUTELY!--but it can't do much for self-inflicted ignorance.

Ann is absolutely right. Property insurance underwriting has been so liberal the last little while that insurance companies have lost money b/c of claims. The only reason companies were able to swing it was by investing premiums/other flexible assets.

What this means is that people were getting excellent rates due to a) market competition and b) the low historical probability of inclement weather. Consumers obviously benefited from this by receiving very low rates, but the insurers were hard pressed. In the long run this could turn into insurers folding, and any unpaid claims not ever getting paid, and/or insurers becoming much more stingy with paying out claims and taking more and more claimants to court to fight out the claim amount.

to John and Ann: As you were so quick to defend insurance companies can you than answer these 2 questions-

1. Why do I must subsidize investment losses of insurance companies? It is not my fault they invested, poorly, MY money for their own gain, nor was I asked to share the profits when they were raking millions.

2. By what standard, statistic, calculation, benchmark, does my credit score affect my home's possibility of getting flooded, burned down, robbed, in short, damaged in any way shape or form?

things are going wrong at cooperators.they tried to double rates on one of our homes and we have excellent credit.ten mins on the phone with a rep straightened it out.(ten dollars a year higher).they may be having financial troubles and are trying to rectify the situation.wrong way boys!someone in head office is probably getting those nice bonuses to save or make money.take a look down south to see how well that worked for them.you may end up losing your clients that made you the company you are.try a new method.maybe get rid of the person who is ruining your company and see if thats helps.go back to the old ways that made you who you are today.a company people respected.

I see nothing wrong with using credit scores as one of the factors in determining a customer's premium. Insurance companies assess risk, and the more accurately they assess that risk, the less of a difference there will be between the amount of money a group of clients pays in premiums and what that group collects in insurance proceeds. It does not surprise me that, statistically, people with bad credit would constitute a greater risk. If insurance companies did not take a customer's credit history into account, people with good credit would end up subsidizing those with poor credit, and that would be unfair to people with good credit.

I was notified by my insurance company, the Cooperators, over a year ago telling me that they will be checking my credit score. The reasoning set out in the letter was that people with lower scores are statistically more likely to not maintain their home and therefore make an insurance claim. They also said that I had a choice to not allow them to check my credit rating, with a catch. If I said no, then they will assume the lowest credit rating possible and calculate my rate accordingly. So to me that's not a choice, that's cornering! So if my score is low or mediocre, I should let them use it, at least that way the hit won't be as bad. Bad business if you ask me. They also told me that ALL insurance companies were using the same rating system so I didn't know I could go to a company who respected my privacy!

Why was the incorrect reference to AIG left in? AIG was an American Life Insurance company, not a Canadian General insurance company. Last time I checked their were no bail outs for any Canadian Insurance companies. I guess we are looking for headlines. Give the reporter a raise, she got the headline, but failed to report the full story.

This is not right. Illegal to go into our private lives to assume....THE PRIVACY ACT IS BEING VIOLATED AND HAS NO BEARING ON OUR HOME INSURANCE RATES? Robbery....in every form under the guise of providing insurance.......It's about time the people start their own Insurance company ....instead of letting the stock holders begging for more of our money. Wrong, Wrong, Wrong.

Finally the companies involved cannot belive this is a good thing to do because no one said yes to the interview request. Shameful.

John, come clean and say what insurance company you are with Co-operators, State Farm? If you are reading drom an application like that you are obvuiously in the industry. Except for those in the last couple of years applications signed in the last couple of years the use of this information to determine rates for home insurance was never explained to the clients. ASsessing the application is a whole lot different than gouging the clients. Therefore you are wrong in your assertion that nothing is foul here. Really new consent should have been obtained for this information. Cooperators went on consent granted as long as 30 years or more for some clients when this stuff was't even thought of in Canada. Obviously this is what Aviva felt as they called their clients. Why didn't Cooperators do the same and advise of the high and low effects rather than a letter in the mail.

colin...you are not getting a discount. If you compared your rate today to the rate as to what it was previous to credit scores being used you most likely wouldn't see much of a difference. That is the entire problem. The "discount" is only compared to what it would be if you either had bad credit or refused to give access to your credit history. If you do not your are branded to be the worst of the worst and charged the highest rate. All you had to do was look at the show when this happened. The rate went up 2000 dollars. Ridculous and the practice should be banned. Sorry colin, but if they said you got a discount you have truly had the wool pulled over your eyes and that is what some insurance companies like cooperators are counting on.

This is more US nonsense crossing our borders and it needs to be stopped. The credit score has become a big ugly monster in the US where people are wrongly charged more for home insurance, car insurance and are also denied jobs because of their scores. This is big brother on steriods.
I am a former consumer lender and I can tell you that the credit score assesses credit risk, not insurance risk. There is no correlation. The credit score itself is flawed because it does not take into account how the score got to be the score - whether it was from habitual credit abuse or a temprary setback due to unemployment. There is a difference. Bad things happen to good people all the time. As a society, should we dump on them even further after a job loss by increasing their insurance and credit card rates? Kicking people when they are down is what the credit score does best and companies profit.

Pride if ownership is slipping, houses are bought and sold like children's clothes. For the past few years, a house could be bought for less than 5% down, amortized for 30+ years and that left very little in the hands of new homeowners to properly maintain and protect their homes during severe weather. This trend will only get worse when interest rate rise.
So, for the homeowner who has been insured for many years, not relying on their insurance company to maintain their home through frivolous claims and have little to no mortgage producing a higher insurance score( not credit score) should they not pay the appropriate rate?
Yes, I proudly insure many families, the correct coverage for the right price is what I work for everyday.

X2 for ANN, coudnt have said it better!

Credit Score is just one aspect of the premium increase for some people...the show was very one sided...obvioulsy that is what Marketplace does.

No insurer would ever talk to them when they had already decided on the outcome of the show.

As for the pilot referencing insurance companies, and there credit worthiness, specifically AIG...what an ...that is all US based history, not Canada.

AVIVA Just did the same huge rate hike to me last fall for my house insurance!

Have you ever heard the phrase: there are at least two sides to every story! Once again, the CBC is spuing one-sided propaghandi without all the facts. This is embarassing investigative journalism. Ann's comments (above) are spot on. Severe weather claims have created an industry wide problem. The only ones profiting are the home restoration and repair businesses. If you did your homework, you would take note of the fact that mutual insurance companies are owned by the policyholders (you and I paying insurance premimums). If there are profits and enough funds in the loss reserves (which is regulated by the provincial government), then the policyholders are sent refund cheques or there are rate decreases. Insurance is all about sharing the risk of the unexpected, to help everyone recover - no better, no worse than they were prior to the loss. To keep things fair for all, credit is used.

I strongly agree with Ann. The main driver for rate increase for property insurance is increased number of water claims. Also, as John mentioned, the consumer has the right to say no to personal informaion consent. Besides, many other financial companies are checking the credit rating to determine, mortgage, loan, credit cards and even company cards such as Bay, Sears, Best Buy, Future Shop...etc.
*There is always the option to change career for those who don't believe in what they do.

Both sides were not presented. Storm losses in 2009 across Canada cost in the HUNDREDS of millions. The home insurance product is not sustainable without substantial rate increases.
Another thing to consider: Would the bank give you a favourable interest rate - or indeed a loan or mortgage if you had recently claimed bankruptcy?
It is not just about the "physical" risk but about the individual who buys the policy.

I agree with Ann whole heartedly. Why would Wendy make it sound horrible that an insurance company would not want a certain type of customer? There is nothing immoral about that. Is she going to go and make Mercedes feel bad because their cars cost too much and they don't want customers who don't have the money to pay for their product. I am dissapointed Wendy! The insurance market is like any other free market - some companies target certain customers and the customers are free to change to those companies that target them.

As an insurance broker, I was extremely disappointed with the behavior of the companies named in your story. The practice of credit scoring is not in keeping with the basic philosophy of insurance, which is the spread of risk - "the losses of a few are shared by many". The way in which it is being implemented violates the principal of utmost good faith, which one of your guests correctly pointed out. It is alost vulgar that the Cooperators, a company formed by a group of prairie farmers who were not able to obtain fair treatment by existing insurance companies, employs this practice. I was disappointed, however, that you did not mention the names of companies who are not using this as a basis for rating clients.

I,too, have had an experience with Cooperators. When my Mother was moved to a nursing home, her home was occupied by my Niece and her husband and 2 small children, who had lived there with her for a long time, at Mother's request. I as her P/A, looked after her bills. My niece was responsible for the utilities, and I paid the insurance and taxes. The house insurance had been with Cooperators for at least 20 years. Unfortunately, and completely because of my memory lapse, I was late with the payment. When I remembered it, I sent a cheque for the complete amount. To my knowledge, there had never been a claim lodged. However, because the policy had lapsed, they would not cover the property. I ended up with a policy with a company that costs almost twice as much. I was given no reason for refusing my policy. My Mother is 92 years old. I guess I just found out why.

You want to know why no one would do an interview with you?? Because you only tell one side of the story. Here's a question for you: What company did he move to that was the golden child that does not use credit? I'd like to know of one out there. They do credit checks for: Cell Phones, Hydro, Home Telephone, Home Internet. What is it that these companies are going to lose out on? Oh maybe a month or 2 of bills or maybe that expensive router you get. The banks check your credit for mortgages, but if you don't pay them, they will just take your house and sell it so no real risk to them. So why do they need your credit again? The insurers can lose millions of dollars on someone and they don't have the right over all these other companies to check your credit?? by the way, I didn't see any stories about those people that had their premiums go down and I know they exist.

I would be concerned that the credit score was inaccurate too. I wish Marketplace would go one step further and investigate the keepers of our credit information.

They are virtually unregulated and completely free to share incorrect information with anyone who pays for it.

The lower the score the higher the Insurance rate they can get!! The Insurance company would pay Equifax and TU for the service - the reporting is left up to the financial institutions - they often don't report on time and the info posted is typically riddled with errors.

PLEASE, PLEASE, PLEASE MARKETPLACE - GO ONE STEP FURTHER AND INVESTIGATE THE CREDIT BUREAUS.

Its time to pass legislation that will ban the practice of using credit scores for insurance purposes. If we dont stop this practice then this gives the insurance industry the green light to use any frivolous excuse to raise premiums.

If the insurance companies think about raising premiums after this ban then we need a price ceiling because it works!

Paul the pilot say he has a great credit score and has never made a claim. Doesn't that prove the point that he should be paying less for insurance because of his great credit score?

Thank you for the info .

Your story is very one-sided. You should have interviewed an actuary to give insurers a chance to explain their position. There are people who benefited from credit based insurance and who received a discount. Credit based insurance is not after people who don't have jobs. People who don't manage their finances are higher risk in any financial industry, not only in insurance. People who don't manage their finances are those who spend more than they make, and they are not necessarily the people who lost their jobs. If they don't manage their finances, they are not going to manage their property and they are more likely to submit more claims. Are all your stories one-sided?

I am an insurance agent working for a company that uses credit score. I have never lied, I have always been up front with the client. I have never been pressured into doing any dirty work for the company. Every client is asked to sign a document consenting us to look into this. Just as a bank will not release a mortgage why would we pay for your home to be rebuilt with out checking first to make sure you'll pay your bills? In a whole lifetime, your insurance premiums, no matter how expensive, would never even come close to the cost of rebuilding your house. People complain about high rates for insurance, but don't even quiver at the fact that once there mortgage is paid for they will have doubled if not trippled the amount of the original mortgage. Thats billions of dollars profit most insurance companies break even! I know what utmost good faith is and practice it daily

We too just got a big surprise from the Co-operators, our premiums went from 1166.00 to 2041.00 with no warning. We have always been insured through them ( 20 years)with no claims.
As far as I know my credit rating is not bad,or at least not bad enough for a 75% increase. I was looking at the paperwork from our home policy and could not find any mention of a credit check.
The problem is you have to have insurance,as per the bank holding your mortgage.
When I contacted my agent, he set up a meeting to go over the changes, and when I showed up at his office, they said he was gone for the day and would not be in ( I have not heard from him since)
Like the folks on your program, we are trapped. I feel I am a good customer, they take money monthly out of my bank account with out issues, any changes or inspections they do, I comply with and I don't make claims. Thanks

Just to clarify something that was mentioned in your tv show, that should not never been aired. The pilot mentioned that the insurance industry is part of the biggest bailout in history. No Canadian Insurance companies were bailed out. Those were on the U.S. side and they were mainly Life insurance companies.

Please check facts before airing erroneous infomation in the name of senationalism

If an insurance company is going to give me a discount because I have good credit -- I say good. I deserve it. Insurance costs enough so why would I not want to save money?! My cell phone company looks at my credit (trust me -- you get a better monthly rate deal from them if you have good credit), my cable company looks at my credit. Basically everyone does. If the company is covering my house for 300K and my car and family for a million or more (my liability -- not the cost of my car --haha) than I'm fine with it especially if it saves me money.

Please can anyone supply a list of companies that don't use credit scores I don't see why we need to give credit information to insure bricks and mortar. Won't it be better to give discounts on fire alarms, CO monitors, & outside lighting?.

To Roxanne - You may want to review the privacy documents you had signed at the time you got your home policy, and the fine print on your insurance forms that you signed your name on. It's all on there! That's the problem with all of us - we don't take the time to review what we're putting our names on. We just sign away! I did it too - but my credit is great and my rates actually went down this year! So yes, it seems they do offer a price reduction for those who have great credit! And I did have to make a roof claim last year - and my insurer took care of what needed to get done!

While I understand the reasoning behind a financial institution checking your credit when you are asking to borrow money, I certianly don't understand why a person's personal credit history has to do with obtaining a service.
Especially the clients who have been long standing without payment issues or claims.
One writer says her premium actually went down because of this - makes you wonder how long has she been "overpaying" over the years and how much did they really take in excess of what they should.
Increase the premiums of those who don't pay or have many claims, don't penalize the good customers- in spite of their credit scores. Bad things happen to good people, sometimes - especially in the current global economy.

Can someone post a list of companies that do and don't use credit scores?

Let's see.. we all pay insurance for our homes right? Let's do the quick math. Grab your calculator folks! 100,000 people pay an average of, say for this example, $1,000 a year for home insurance on a home that may cost, say $300,000. Again, this is just an example so keep calm. That's $100,000,000 in premium collected! Excellent! So far, we're on the same page. So now.. let's just say, that 50 people have to make a full claim in a year because of random fires, total losses, etc. That's less than 0.0005%! That's $15,000,000 (15 million) in losses that your insurance company has to pay out. Which leaves us with $85 million left in the bank. Now imagine for a moment - a 100.. or 200.. or even 500 claims are made.. what then? Think about what you're complaining about. $1,000 for a total loss, to me - I think is peace of mind you can't buy anywhere else. There's two sides to all stories!

Credit rating based insurance is an excellent idea. Why should a successful debt free individual suffer a personal financial liability because of other's personal financial incompedence?
We are not yet a communist state but NB's apparent idea to ban such a cost structure may be the first step.
What is the difference when you look at life insurance rates that are noticably higher for at-risk smokers? Should non-smokers pay more because smokers pay more now?
I predict that is what will happen across the board with house insurance, we will all pay more if the NB idea becomes reality.
I am disappointed that CBC only takes the NEGATIVE approach to an issue rather than doing an enlightening broadcast showing the positive attributes of a topic.

Our yearly insurance with Cooperators went up from $1500 to $2400 with no explanation. We never missed a payment, if this is what they do to paying customers, I wonder what they do to the bad ones. Anyways, we hunted around and got the same insurance for less than the $1500 current year. Thanks Cooperatoars for that! Is it illegal no, sleazy..ya

when I got my statement I was outraged at the increase, I called my broker(the co-operators) and asked what was going on he told me my property value had gone up and they checked my credit score and there was something they didnt like, he said that many people have called and complained and there was nothing I could do. I said sure there is so I changed companys and am paying less for more coverage fu co-operators I hope you go bankrupt.

I agree with Ann and John (they appear to be in the business) however, I also agree with the comsumer Roxanne, et al. It's one heck of a shock as a consumer, to receive news that your premium is going up exponentially despite being claims free - it's not an easy one to accept. From the business side, you lose business and in some cases you gain business; it certainly has kept the brokers busy and I'm sure the companies as well. I've seen rates increase where the clients are claims free, have excellent payment history and have been long term clients. Other clients that have had cronic payment problems jump ship every year for a cheaper premium and they don't seem to experience the same hit. I don't know what the answer is...property insurance rates have been relatively low for quite some time now and to some extent are now adequately priced- insurance rates will always be a hot topic

I was actually dropped by my insurer and my question for the reason has never been answered. My broker manager to get me new home insurance with 100% increase.

I love to see these companies regulated and that the government has it own no frills insurance to compete with these monster insurance companies.

These companies not only posted billions in profits they may have received stimulus funds. I hope you investigate this and advise of how much stimulus funds went to insurance companies.

One final note, we must open our market to foreign insurers and the day they are here the prices will go as low as you love them to be.

The use of credit score as a rating factor has been used for property insurance for more than five years in Canada.

Credit Score is one of the most predictive indicators of future claims for property and casualty insurance.
The use of credit score for insurance purposes is non-discriminatory, particularly as it relates to age and income.

Regarding Johns comments, there is clearly a difference between mortgage and credit card companies, they are lending money whereas an insurance company is offering coverage in exchange for a premium, big difference. Furthermore, while I am aware that insurance premiums are connected to credit score I feel this is bias and unfair judgement, as again, they are not LENDING money. I feel sad that those of us hit hard by the economic downfall and job loss will be picked on again by rising insurance rates, talk about kicking someone while they are down ... It is my opinion that if you are not abusing your insurance or missing premium payments, rates should not be increased. Clearly those of you that feel this is fair treatment still have your job and financial situation intact, it is my hope you don't have to feel what others of us are dealing with.

Credit score needs to be reviewed and legislated as insurance companies have been using this as a rating factor for 5 or more years now. The Co-operators to my knowledge just very recently started implementing this and when they did they sent a notice with every renewal advising the clients that this including in one of the many premium rating factors used to establish overall cost. Yeah!for Co-operators maybe now this will become general knowledge to everyone and legistation can be implemented to decide what is right or wrong and if this is acceptible as a business practice?

My rates went down.. i was told it was because i had a good credit score.. Checked with a soring company and i do.. inquired what makes it good or bad... it is higher debt load, high credit card balances and etc... I do not want to pay higher rates for the person that has not good credit score... Taking care of your money is up to the individual not a thing that all of us should have to pay for.

As much as we may or may not agree with this, every person who signs an application for homeowners insurance has signed conset to obtain credit score. Wheather the company was not using it before and is now starting to use it, if you've signed an application, you have provided consent.

If you are in good financial standing, you will see a discount on your policy. It makes sense that someone who has a past of not paying bills, will likely not have the money to upkeep their home and therefore is likely to make more frequent claims. There are always exceptions to every rule and unfortunately rules in insurance have to be black and white. This will also get better as your credit score gets better and in this case will reflect on your rates.

Hi,

Rick. I appreciate that you are acting "in utmost faith". However, do you know for a fact that all the companies you offer do not access credit score? Many of the large companies do, and most brokers carry several of these.

As an insurance broker for the past 30 years I have witnessed many changes to both home and auto insurance in Ontario, some good and others not so good. The latest is "credit scoring" another underwriting tool to off set the rising cost of insurance claims. The answer is simple.
Insureds with a good credit score will enjoy a discount and insureds with a not so good credit score will pay more.
The choice has always been the insureds. There are many Insurance Companies out there who have not implemented the credit score rating system and are not planning to. If I had a poor credit score I would seek these companies out. Remember payment history has always been an underwriting factor in the insurance industry since day one.
Nothing new!

"...But even when the public is educated about why and how insurers use credit scoring, consumers still don't want to be assessed by their insurer for credit risk, said George Cooke, president and CEO of The Dominion.
"When we ask consumers whether or not they find credit scoring acceptable for use in auto insurance and home insurance, the vast majority say, 'No, they don't,'" said Cooke. "When you explain to them the [argument] about segmentation and price differential, they understand, but they still tell you,'No...."

(above quote is from a Canadian Underwriter article entitled "Application for Credit)

True, insurance companies use credit score for property insurance to determine risk. It is not said for all that if you have bad credit that you will infact put through more claims or fraudulent claims but from statistics and previous data this has obviously been proven that enough people in this rate category cost the insurance company and all other policyholders more money. Banks do it when assessing what kind of interest rate you will get based on your credit score (discounting etc) so do not bash the insurance companies for doing what all other financial type institutions have been doing for years. Also, the premiums being discussed are not strictly credit score related as "Ann" had mentioned it is also due to increased claims in general (weather, low return on investments) so like every company in business a profit is the goal so why should it be different for insurance companies

Something has to be done about the insurance companies who have been increasing premiums lately. Some checks like in the US on Medical Insurance companies.
How can insurance companies be justifies when they collect the cost of your vehicle in 5 years as premium

Have you ever got a piece of mail stating you have been approved for a loan ( wells fargo, city finanical or even from capital one), but yet you dont do any business with any of these companys. Well guess what they have all pulled a soft hit on you without your permission. A soft hit only gives them access to you credit score number not your full credit history report. I like the fact of using credit for rating purpose & the only ones who complaine are the one with bad credit, because they have to pay higher rates, well if they were more responisble they too whould have lower rates, also home owners who cant afford maintence and repair on thier home are the one who have more claims, more claims a company has to pay for, means higher rates for everyone....

Our house insurance just went up by 40% we have been trying for days to get hold of our agent to question it but she is always busy, now the payment is late(was this purposely done, we will question her when she speaks to us) .The thing is we have a terrific credit rating.The insurance company, co-operators.

Using credit score is a great idea. Why shouldn't those who are responsible with their money pay less than those who aren’t? Honestly, those who are responsible with their finances tend to be more responsible in other aspects of their life as well…like keeping their homes in good repair.

I COMMEND THE CO-OPERATORS! Although insurance companies have been using credit score for years, the Co-operators were the ONLY ones who were up front about it. Besides, credit score is only one of many thing looked at.

Marketplace focussed on the few with a rate increase; but what of all the PEOPLE that HAVE HAD THEIR INSURANCE GO DOWN? Why not focus on that!

As for consent, I gave consent when I signed my application, then again when I signed the Privacy Consent form. Credit score was specifically listed on each of them.

SHAME ON MARKETPLACE FOR NOT GETTING THEIR FACTS STRAIGHT

That's a real tough ethical dilemma. According to Rick, as a broker he's forced to lie on behalf of the insurance companies he represents. He probably feels better when he gets his approximately 20% commission on the sale of each home insurance policy plus, with any luck, a profit sharing cheque at the end of the year. Maybe Rick should think about biting the hand that feeds him. I guess he hopes more insurers will abandon the brokers and start selling direct to consumers so that perhaps they can pass along the savings. The reality is that the very regulatory bodies that seek to protect insurance consumers create a situation where insurance companies must overcharge their best customers in order to subsidize the losses generated by their other customers. It is a complex set of issues, and certainly not reducible to one simple notion that insurance companies are out to do harm.

As an insurance broker in Nova Scotia for almost 30 years, I can assure you that the insurance industry is only doing what every other financial institution has used for years as another tool in helping assess risk. It is true that property losses, in particular water damage claims have skyrocked in recent years,and as such, the industry has been forced to make some hard choices in the way a risk is assessed. A credit score is only one of a multitude of variables an insurance company uses in rate determination, and if a person's credit score happens to be low, it doesn't necessarily mean they are not an acceptable risk, it just means their premium may not be as competetive as someone with a higher score. Rest assured that it ( the credit score )will never be used as the only reason to deny a person(s) coverage. In my experience, it is rare to deny anyone coverage for whatever reason.

I am not insured with the cooperators, but my insurance company uses credit score as well... has for many years from what I have been told. I have recieved a discount for having a good credit score. My agent explained everything very clear to me and it gave me a great understanding as to why they have decided to use credit scores. From this little clip I dont think Marketplace did a fair comparison betweeen insurance companies. They make it seem as though this one company is the only one to use credit score... I encourage all of you to check with your companies and see if they use it.

If two people live in the exact same house on the same street in the same town, but one is statistically proven to be 3 times more likley to have a loss, than why should they both pay the same rate? You also have to remember that even those with good credit are still seeing a rate increase, just not as drastic as those with poor credit, becasue of the amount of claims being paid overall. The rating is still highly dependant on age of home, customer loaylty, claims in the past, mortgage free, age of the individual,other product lines with the same company, geographic loaction and about a hundred other things. People need to understand also that its not just one company thats doing this, its all insurers in Canada. Shame on you CBC for not focusing on the real issue here which is system abuse, storm frequency due to climate change, and rising contractor overhead profits.

I work for Cooperators - those of us who have to deal with the public regarding these increases are mortified that the company is doing this. Unfortunately the people in charge make these decisions and we are left dealing with the fall out.

I am not insured with the Cooperators for anything - even with the "staff" discount I get my insurance cheaper elsewhere.

Just what in hell does a person's credit score have to do with their home insurance risk?
As far as I'm concerned, if the client has paid their premiums they have reached the criterion for coverage.
The last time I checked, those tall buildings on Bay Street are owned by banks and insurance companies. I have a large problem whipping up any sympathy for their profit-lines.
Advice to anybody getting gouged with insurance renewals....check out a half dozen competing underwriters and take the best deal.
Good work CBC for researching this!

My residential insurance increased by $109.00 from Yr. 2009. The insurance company's excuse is due to rising costs and frequency of claims they have amended their Claims Free Protector Endorsement which means I would have to pay the deductible on the first claim. What a crock! I am being punished as a result of abuse by others. A few adjustments are of no consequence to me.

As someone who has home insurance and also who has a spouse who works in insurance, I get to see a bit of both worlds. Hate to say it but when they get our consent to do a quote they ask for access to personal information that includes driving records, claims history, AND credit information. So they do ask. No question about it. We give them permission. Now as for rising costs, it is often related to increase in claims (Edmonton had a nasty storm that tore up downtown last year ). Costs to rebuild homes are up, water claims now on average exceed $40,000 to $50,000. So it seems Marketplace has a lot of half truths out there, as well as some out right speculation based off 0 fact. It sucks, but hey, this is a fact of life. The day when people make LESS claims, and labour costs to build homes go down... our insurance will as well.

Actually Rick, almost every insurance company uses the Insurance Score as a risk-assessment tool. Call your company. I'll bet they've collected your score whether you realize it or not.

Not all companies " charge or raise rates" due to credit score. My company asks permission to check. A discount of between 3 and 20% can be applied depending on the score. Otherwise, either through no persmission or not a good score the rate is without a discount for this but all other discounts still count, like age of home, claims free history, mortgage free etc. There is no downside or extra charge. It rewards good credit but does not penalize if not.
Like all complaints about insurance, it is always slanted for dramatic effect.

Thanks Wendy for helping to expose these gouging fraudsters.
They have reaped mega-profits for years and use any excuse they can imagine to hike rates.

Try making a claim with these crooks and the go cameleoan on you. You get the good guy, bad guy routine, several agents, anybody who can trip you up or find a reason to deny your valid claim.

Who are the biggest money grabbing, gladhanding crooks?
Is it the banks, the insurance companies, the tax man in his many forms, the government bureaucracy? Wrong.
It's all of the above.

Good work and I do enjoy watching you.

I was shocked yesterday when i open my mail from the cooperators to find that one of my home policy went from 705.00 a year to 1008.00 for 2010 ,that is a 44.0 percent increase. I called my agents office and was told they had lots of claims in the past year that is why my insurance went up.I have had insurance with them for the past 29 years and never had a claim.

There is no question that credit is being checked by Insurers with respect to property risks. Some are using credit score as an "underwriting measure", and some claim not to use it to determine rate at all. Being a broker, I am aware of markets which now apply surcharges to premiums if the policyholder's credit is within a given rating - some surcharging as much as 80%. Anyone in this industry claiming that credit is not being used or affecting the rise in insurance premiums needs to open their eyes to the truth. Credit isn't the only contributing factor to property increases however. Insurance to value is another major issue at the moment, wherein insurers are over-inflating values to compensate for the increase in claims costs - mainly being driven up by thrid party vendors. Maybe Marketplace should also investigate that aspect of property insurance and it's affect on consumers.

"THE CO-OPERATORS...a better place for you"

I work for the co-operators, and believe that this decision to use credit score as a rating is absurd.

- Their new philosophy is that they would much rather cut 50% of their clientele that fall in the bad-poor credit rating and cancel their insurance or should i say increase your rates to the point that you have no choice but to shop elsewhere, eventhough you have been insured with us for 20+ years no claims ect.. and all your insurance payments have been collected with no issues, but because you failed to make a credit card payment on time, your rates double or even triple in some cases..

- So in other words, if you are a "good standing" client, with a good credit score with no claims history and pay us thousands and thousands of dollars...you are safe with the Co-Operators...a better place for you ?!?!?!?!?!?

Part of the Credit Score calculation is the assessment of Assets to Debt (the asset to debt ratio). You are allowed a certain amount of debt based on the value of your assets, but your credit score will worsen if a greater amount of debt is carried. Stats Canada indicates that the people who have the statistically hightest Asset to Debt ratios are single parent families and families where the primary wage earner is under 35 yrs.

What this basically means (I believe), is that groups of individuals who require a higher asset to debt ratio to meet a basic standard of living will get a higher premium.
Is discrimination not the application of a different standard to a select few individuals?

My home and car is with Allstate, last year my home ins was raised, when I called to ask why, they said it was to cover the rising cost of building materials, this year I received a call to say it was going to go up another $20 per month, same reason given. Now I read your article and wonder what on earth is going on. I have never made a claim on a house I've owned EVER and I'm 65 years old. I am now paying almost as much for my house as I am for my car.

Credit scores are supposed to be used by credit grantors to ajudicate credit applications, NOT as an intelligence database by nosy insurance corporations..

There is HUGE privacy issue here and I do not think the CBC are quite getting the angle right in its coverage.. The focus should be on PRIVACY, not just premium gouging .....

Canadians are very lax when it comes to protecting their own privacy.

Do you know how much money Equifax makes in Canada every year.? Can you think of WHY Equifax might have an incentive to sell your information without you knowing about it?...

is this happening with auto insurance as well?

My home insurance with the cooperators has gone up 35% in the last six months. In that time, I have gone from living commonlaw with somebody else to being single. When I called the cooperators, they told me it was due to increased severe storm activity throughout North America. My bills are always paid on time and I'm claim free. In fact, all my bills are paid on time and in full.

I'll be watching tonight.

I'm not surprised. The Cooperators have used such tactics to increase rates in the past. In 1988, despite 14 claim-free years and perfect credit histories, the premiums on our 3 vehicles were increased without warning or consideration. The reason they gave then was that we had a teenaged daughter(age 15) in the household with access to the vehicles.
We were very upset and insulted to find they placed so little value or trust in their customers. They provide a service of security for which we pay an incredible amount of money even during our own rough periods.

Within 48 hours we had coverage for our vehicles AND home with a different insurer. Old habits -and grudges die hard.

Ann... consumers should not have to bear the brunt of the insurance industry tanking the economy- on every level! AIG (now Chartis) was one of the insurers that started the downward spiral of the stock market with their "unique" products. Tax payers payed to bail them out. Since the stock market is not producing high returns, the insurers are suffering from negative investment risk... as we all are! Policy holders should not have to make up this shortfall. It sounds like you are an adjuster and are a bit bitter on nuisance claims. Change the system and stop conditioning claimants into settlement cheques,make them prove a loss, petition for tort reform and prosecute fraud. It is time for the industry to take a stand on nuisance claims and provide the policy holders with loss prevention strategies.

I have worked in the industry for 10 years. I have seen strategies by insurers to carve out "undesirable risk" from their book of business. In most jurisdictions, underwriting third party auto liability is regulated, but physical damage coverage is not. If you make a claim, the insurer will bump up your rates for physical damage coverage (on an asset of depreciating value) to push you into shopping around. Insurers who want to get out of a geographical area will look for reasons like “credit” to rate your risk higher in order to maintain a low loss ratio and to force you to find another insurer. Contractually, if you cannot or do not pay your premiums; you do not get coverage. The insurers do not carry any “credit risk” for individuals. Credit has no material bearing on underwriting home and auto risk.If you default on your mortgage- it is not covered under your home owners insurance!

The fact is, there is a correlation between credit scores and risk. Research proves that those with poor credit engage in activities and behaviour that result in losses. The report did not interview actuaries and underwriters capable of explaining the correlation nor did it state and the actual statistics relating to your credit score and your claim history. Creating a report that ignores the facts results in the public buying in to an assertion based on incorrect and flawed information; its socially irresponsible!
I work hard to ensure that my bills are paid on time and my finances are in order.As result of my due care, I exhibit less risky behaviour and am involved in fewer losses. Why should I have to pay high insurance rates to carry those who act careless? Those who create the losses should pay the price, not me.

Last week I received my house insurance renwal notification from the Co-operators and they more than doubled my house insurance rates. I called to ask why and they cited high claims rates in Hamilton due to 2009 storms that caused sewer back-ups. I've never had a claim, back-up or damage. Regarding credit score, mine has improved since obtaining homeowners insurance. My car insurance rates were not increased and I was about to add motorcycle insurance, all with the Co-operators. When I was brushed off with a lame blanket statement from a company I have been loyal to since I started driving and since I bought my first house, it took me less than an hour to obtain full insurance coverage with another company for my house, car and motorcycle. All three now cost me less than what the house and car coverage cost me with the Co-operators.

Last year I paid 700.00 a year for my home insurance with the CO-Operators ,never had a claim and this year I have a increase of 44 percent increase compared to last year 1008.00

Also as a Broker, I am concerned with this practice but must adapt to it in a way consistent with principles of professionalism, integrity and "utmost good faith". Once it is properly explained and clients understand it is a fully voluntary "soft" credit check similar to what your cell phone company does when you sign up for a contract, objections fade away. That said, I do not believe credit scoring is a proper way for insurers to rate existing, that is to say, renewing business. An existing customer with a proven claims history and known underwriting profile should be rated on that basis, not their credit score. In other words, credit scoring should be reserved for new business rating, in my opinion.

I say it's time the insurance industry practices are looked into. It is true that the application clearly states "the collecting of personal information" etc and is right above the insured's signature field but don't be fooled; many companies don't require a signed application. What about insureds that have been with a company long before the application was revised to include this clause. Many have never had to sign one of these newer applications. I say go for it and dig deeper; there's alot of unfair rating practices going on. I suggest you look at the auto rating as well. Some of these practices stink of discrimination!

As a broker in BC we are only just starting to see the affects of credit scoring. It hasn't been widely adopted here yet, but it is gaining ground. Our clients are very concerned with what this means both to their rates, and also to their credit scores and privacy. While the insurance companies can pull out all the stats on why it's relevant, my clients are not as yet buying into it.

I am also concerned by Ricks comments - a brokerage owners should NEVER be telling you to lie to get the client to agree. There are other markets available that don't use credit score and it's the clients choice to use one of those markets. I deal with companies that do and don't use credit scoring, and we ALWAYS explain and give the choice.

I suspect " John " may be working for an insurance company that employs these tactics. As a Broker I have seen the ugly tactics used by main line insurers in the interest of their bottom line. Without question consumers do give permission to have their financial history investigated. How often in the last few years I have seen a client kicked out due to credit score. Often the client has never had a missed payment or had a claim and is an excellent client to deal with . Brokers are threatened on an on going basis to do the compannies dirty work or loose their contract so owners of Brokerages basically instruct their employees to lie or say whatever needs to be said to get the client on board. The first thing drilled into your head when you study for your Brokers licence is that you must always employ the practice of "utmost good faith" . It is on the first page of the manual.

I get a discount so I like it

Wondering if this borders on a privacy issue with the new privacy laws that came about a few years back. If Co-operators never was given consent how can they do this?

I think you should get your facts straight! Are companies credit scoring on property insurance. Absolutely, and why not, every other financial institution does the same thing. However, that is not the main reason property rates are skyrocketing. If you would dig deeper you would see that insurance companies have been losing their shirt on property insurance for the past 5 yrs. They were subsidizing with investments, which we know now amounts to zero. Companies are now rating according to losses and perils. Look at the number of terrible storms in the past few years, rain storms, hail storms, tornados and the fires in BC. The losses are in the millions. The average water damage claim is now $50,000 as the majority of us have fully finished basements. You need to look at the whole picture and not take a misguided statement as the full reason for property increases.

It is unappreciated how the CBC infers that there is something illegal going on. Many organizations collect information for their clients for the purpose of assessing their risk. ie.Banks when applying for a mortgage, credit card companies when applying for a credit card etc. An application for Home Insurance clearly states under section 8(b)(paraphrased for brevity)that when a person signs the application, information may be collected for the purposes of assessing the application. It clearly states credit information and claims history in that section as information that will be gathered. The section is labeled Personal Information Consent and is directly above the clients signature area. Nothing funny, nothing foul.
Please dont color things in order to gain viewership. Just state the facts as a credible media outlet should and let the consumer digest and come to their own conclusions.

I was shocked to receive a letter stating that my premium was going from $62 per month to $149. I have never filed a claim. I asked for an explaination from a rep at the Cooperators and i was told that part of it has to do with my credit score. This was news to me since no one has ever mention anything about my credit score when i start business the cooperators.