In Canada Insurers keep a secret history of your home and claims.
The report is called "HITS" the code name for Habititational Insurance Tracking System. You can request a copy and see what your Insurer paid out on your claim and what they paid their adjuster/ or lawyer. Request a copy for free by sending a fax to CGI at 514-415-3989 or mail your request to:

CGI Autoplus and HITS
1350 Rene Levesque, 7th Floor
Montreal, Quebec
H3G 1T4
The following information is
required for the request to be
processed:
• Consumer’s complete name
• Consumer’s complete mailing
address
• Consumer’s daytime telephone
number
• Consumer’s driver’s licence
(AutoPlus only)
• Statement requesting a copy of
the consumer’s AutoPlus or HITS
report
• Consumer’s signature.

We were victims of having our property ruined by a hydrant and water main bursting water on our property for several hours. We had excellence in coverage with TD Insurance, except thay do not want to be fair on our claim.
ie: they told us our sidewalk is not a structure? Like on the 8th day God created pavement. The adjuster told us all the mold from the flood was "natural black debris" The City told us it was all an Act of God. So I can understand that Basil likely did not get his claim paid fairly. To top it all off TD cancelled our Insurance when they have yet to authorize any repairs.Of course TD knew we can not get fair Insurance on a damged home and by cancelling our Insurance we can not borrow on our home to fix it. We have a mortgage with TD, who refered us to their insurance...what a nightmare.

I have home insurance with the Co-operators. A week ago I got a letter saying that my insurance is going up from $50/month to $72/month.

I called and TD Meloche and got insurance for $33/month with 3% reduction in my premium every month as long as there is no claims.

Also Bonus for not making claims...

The problem here is not with the use of credit scoring. People are upset over their rates going up - the fact that it's credit score based isn't the issue. If their premiums go down because they were rated based on credit, no one complains!

The simple fact is - personal property insurance is a money losing business, and has been for more than a decade. Insurance companies have survived by making money off of automobile and commercial insurance to cover the losses they have in property. Now that government legislation has heavily regulated and limited returns on automobile insurance, and commercial insurance has been faced with enormously increased competition - insurance companies can no longer subsidize property insurance with other lines.

Add to that the increased costs - water damage claims now cost 10x what they did 10 years ago, and the frequency of storm related losses (hail, etc) has increased - and you have a recipe for increased rates.

Insurance companies use many factors to subdivide risks to try to retain profitable clients on their book of business, and ensure that unprofitable clients are paying accordingly. This is done on large numbers of people - not individuals. It isn't a personal attack or on personal circumstances - because it's impossible to predict who's house is going to burn down, or have a sewer backup, or get hit with a windstorm.

It boggles the mind that people get upset over having their credit used as a factor by insurance companies. Banks use it for your loan rates and consistently make higher rates of return and profits than insurance companies ever have. Credit is within your control - you make the choices that influence your credit score. If you make poor choices, your credit suffers. Many factors used by insurance are out of your control - your age for example. If the concern was truly fairness, why focus on a factor that is the result of your own decisions? The concern here is simple - my premium went up, there for insurance company bad.

If you want to look at the financial sector as a whole and pick out who's taking your money and pocketing it - look at the banks, then life insurance. Your property insurance is being given at a loss or at best break even, and it can't be sustained that way thanks to increasing costs and legislative changes.

Plenty of Canadian insurance companies have started using credit scores to help set your rates, saying the lower your score, the more likely you are to make claims. Just say you lose your job -- you might hold off on fixing your roof.

There's a bad storm, and your roof leaks. You're more likely to make a claim.

Frederick says it doesn't make sense

YOU didn't fix your roof and it leaks, the INSURANCE pays for the damage and a new roof, how does this not make sense?

Jim

There are areas where they are paying higher claims amounts, its people with bad credit scores, and they are charging them more. Its the same reason a young driver pays more for auto insurance. thanks for proving the point

When my rates went up I called and asked them why after over six years of never claiming and always paying on time my rates went up so high and they mentioned a few different factors: credit score (new to me), replacement costs, age of the house, previous claims, etc.

When I asked, they reduced my rate to the preferred rate the broker is able to give - so ask for a reduction as it can be worth it. Also, I mentioned that my house was valued way too high so they reduced this amount, as well, which reduced my premium.

I'm with the cooperators.

Sounds like a lot of insurance people here who are supposedly short sighted. How much did peoples rates with good credit scores go down from one year to the next. I am willing to bet 3 - 5 % at most. How much did peoples rates go up with either poor credit scores or refused the credit check? 100 - 200%. All of this and the industry expects people to believe they have studies that they won't disclose and won't comment on to back up what they say? Sorry they are going to have to come to the table with facts and figures from independent studies to show these type of increases will do anything but pad the bottom line. The whole purpose of insurance is to make money by spreading the risk amongst a large pool of people is it not. If there are areas where there is a larger number of claims then that area should have higher rates based on the claims paid. That way the people in areas prone to water damage claims for example woiuld pay a higher rate. Makes a whole lot more sense than this credit scoring. BTW...NB just passed legislation to ban the practice deeming it unfair to the public.

What a ridiculous discussion. There is no connection between credit scores and number or value of property insurance claims. If there were studies supporting that position, the IBC would have them posted for all to read. Every company the program contacted refused to go on the record to even put their position forward, the IBC -- an industry mouthpiece -- included. Cowards.

If you don't want to pay property and liability claims, go into another business.

If ou contact the cooperators or any insurance company they can provide you with the actuarial tables that show the relationship between many factors and the cost of insurance. The most interesting thing about the tables is that credit score is the most consistent and most accurate indicator of future claims. Contact the insurance company and ask for the information. The information is out there, you just have to ask for it. Also credit score, from what I have read, has had no impact on premiums or has decreased premiums for over 85% of clients, what is wrong with that?
I wonder what the answer would be if the following question was posed; do you want to subsidize someone elses insurance premiums, or do you want to have everyone pay a fair premium for the risk they pose, be it credit score, crime, flooding?

And where do people get off assuming that being poor has anything to do with credit score? I have been poor most of my life and my credit score is just fine thank you very much.

Anyway, I never knew that insurance was a god given right, I always thought it was a comodity that people choose to buy.

To B. and T. and C. and J. and all the other pro-insurance people..... Exactly where and how has "Credit Scoring" been CLEARLY proven as an indicator of claims? Who compiled the statistics? 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 company that was offered a chance to give their side of the story refused to do so. Why is that?

87% of the people of Canada (see we can use statistics too) think this is a morally reprehensible practice and the elected governments 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 is not good business and it seems to be nothing but a cash-grab.

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

Wow kathleen. I challenge you to make a more general statement about insurance than "ripping them(people with insurance) off".

What might be easier for you is to explain exactly how people are being ripped off?

It's been statistically proven that people with a worse credit score cost more money for insurers. So why shouldn't they pay more. If I have a good credit score and I cost less, why shouldn't I pay less?

I work in the insurance industry as a broker and property rates are currently increasing not because of credit scoring but because of an increased frequency in water damage claims. There are many different reasons why your property premiums may have increased. James and Terry are correct. Not every company uses credit scoring but yet most of them are increasing their rates in 2010.

The main reason for rates going up is due to all these fradulent claims by fraudsters. But, why punish everyone for this? Maybe it's time the legislative bodies do more to prevent these insurance related frauds.

Scientific studies prove that more than 60% of consumers would pay less for their insurance if credit is used. Why is this a bad thing? Because brokers earn their commissions based on the amount of premium of a policy, they are just afraid that their pay would go down if people were paying less. Talk about protecting their own pocket.....

As the insurance companies are using the credit rating as a factor in determining their rates, should they not also consider the history of the client? I was a Co-operators client, had been for fifteen years, never late on a payment, never made a claim. To my astonishment, I received a letter last year indicating that they would have been checking my credit scores for our home insurance. When questioned about this, I was told that I may refuse, so I did,...guess what, my yearly premium jumped from $538.00 to $1575.00.
I am not "rich" as one of the previous bloggers so proudly mentioned, but I do pay my bills on time and have a great credit score. I know the importance of credit scores as I reviewed them on a daily basis, I however fail to see the relevance.
The fact is the insurance companies are big and we are small fish in their big pond and they are clearly stating, if you do not like our rules, then get out.
The federal government needs to step in a put regulations in place for this,(as is for the auto insurance industry) if not the insurance companies, who, if you ask me are always the winners,will continue to milk us to death.

I believe that Co-operators were given a chance, and declined to interview. But you're right, Brad, they are being unfairly singled out. Co-op and Aviva are not the only ones using credit scoring in Home (and auto, as pointed out). It should have been noted the companies that are not using this factor, the list being much shorter. That doesn't make those companies competetive, necessarily. This has been a hot topic for over a year, and there has been some media coverage. It's just unfortunate that the only time people ask questions is when it's too late. Ask your broker, they may or may not agree what's happening, but they are an informed resource on the matter.

I am an underwriter for a large insurance company. There are factors such as higher rebuild costs and claims frequency that do cause an increase. Credit scoring is also a factor that results in even higher increases. I'm completely disgusted that it's a practice that's now used, it's targeting the people in society who really need help when a storm or another factor beyond their control happens. Insurance is supposed to be there for people who need it, instead rates are going up to help line the pockets of the company and their shareholder.

Hey Kathleen, sure I am part of the industry as well. I'm in TD Insurance. Sure we do pull credit scores ( we don't get to see the actual credit scores). All it does is determine a discount, not the actual rate. We don't see the actual score. No credit scores aren't causing the increase for us. Your average claim pre-2000 was under $10k. Now a days it is nearing 50k to 60k. Look at Edmonton and the nasty storm that carved out a section of downtown last year. Or the huge hail storms in Calgary. That would not cause an increase in claims, would it not? Possible you should listen to Brad, he seems he has some good common sense on this comment screen.

Sounds like Brad is working for Cooperators. If he is he should know better. They were singled out because they advertise themselves to the Canada's largest Canadian owned insurance company. They do not reluctantly do anything. They did this as many direct writers have to gain further premiums from people gullible enough to pay them.
Brad the Cooperators was asked for an interview if you watched the story and they declined. The agent in my area said rates had gone up due to inflation, not credit scores. Talk about telling lies. Obviously they are not that comfortable with it.
Carrie ...I hope you are being sarcastic. Otherwise, you have bought into this which is really sad. How much did your rate drop? 30, 40 dollars. Did it drop 2000 dollars like the example in the show stated it would go up with Cooperators if you chose not to have a credit check? I strongly doubt it. Judging by the amount I would say it has become the most important factor in determining the cost.
It is time governments stepped in and stopped this practice. It has been a hot topic of debate for a long time in the States and it has been found to penalize the poor and middle class unfairly. There are other loss prevention measures that could be used to determine the quality of a risk vs using a credit score.

This story is a joke. Yes I am in the industry. Attacking the one company that is upfront and honest about credit scores!!? Guess who broke the story? Co-operators did!! Insurance is a business, not a charity. If my rates go down becuase I have good credit, then I am not subsidizing others - its all good. People need to remember, insurance is not a government protection program, it is a business and others are welcome to get into the business, but they dont. ING bailed out of it......dosent that tell you something?

I read in the newspaper last year and also watched a report on tv that the provincial government was allowing insurance companies to use your credit score for the rates charged. Shortly after I received a notice from The Cooperators that they may use one's credit score to calculate rates as they were now permitted to do so via the government. When my insurance came up for renewal I was informed that it would be $116.00 per month (up from $54.00 per month). As I was in the throes of foreclosure, I just stopped payment with my bank for anything to do with The Cooperators.

When I saw your show last night I was amazed that the head of the insurance bureau said it was wrong because I wrote them an email where they agreed that insurance companies can raise your home insurance rates based upon your credit score.

This is unfair and unnecessary gouging and taking advantage of those of us that are unfortunate to be out of work or making less wages. It does not translate that just because someone is less well off that they will make insurance claims. I would like to see those stats that they are talking about. I think stats would more accurately show that those who make less money have a difficult time of staying afloat in our economy, and hence gradually incur a poor credit rating. I mean really, who would burn their house down knowing that they would have no where to go because they don't have the money to go anywhere else?

Perhaps you could be more aggressive with this issue because the provincial government permitted them to raise the rates in this manner.

Thanks,

I commend The Co-operators for being forthcoming about their use of credit scoring. No other insurer would step up to the plate. At least with The Co-operators you have the choice, beforehand...no hidden surprises.
What consumers have to realize is that the rates are not adequate enough to pay these increased claims costs. If we cannot do a study to determine what factors result in increased claims then everyone's rates will be impacted - there will be no way to distinguish between the "good" clients and the "not-so-good" clients. If you're not a good driver, you're not going to get the best rate. If you cannot carry on normal home maintenance, you are definitely going to be at a higher than normal risk for future claims. This isn't rocket science people!
What amazes me is the people that complain about rates. They seem to think their $600-700 per year for house insurance, that they've paid into the same company for 20-odd years, is going to rebuild their $300,000 home when it burns to the ground. If you've never had a loss, the insurance company is always the bad guy. How about interviewing some of the people who have experienced total losses? Where are the good stories in this?
Oh yeah...people only want to hear the dirt.

In the end its a free market. Shop around on price and who cares how its determined. Do u know how your 5 year morhage is determined and set at the identical rate at the 4 big banks. Guess they are to big to take on EH. As long as market is open and I know of at least several dozen insurance companies, I don't get the issue.
Was credit scoring invented for this industry?? Don't think so. Have other industries who use it getting your focus as well??

The biggest problem with using credit scoring as a rating variable is that people can't see a direct link between their credit history and their potential for claims. The problem with this report is that they imply that the link is low vs high income. What insurance companies are trying to get at is behaviours not income. You can have a low income and a high credit score(my personal experience). You can be unemployed and have a high credit score and many "rich" people have very low credit scores. There is a very strong link (I've seen the numbers) between how meticulous you are with you finances and how meticulous you are in the rest of your life.

What surprises me the most about this report is that they make this out as if it's something new and as if it's the main cause for premium increases. Insurance companies have been using credit scores for years. The main causes in increased rates are increasing water damage costs and frequency as well as very low investment returns. Any company that tells you it is not currently using credit score for rating is using it in some other way (eg to accept or reject people). The only other option is that their rates are way too high or they're losing money.

As far as Kathleen's comment "we're here when you need us" while, at the same time, ripping them off! I, like most people, felt this way. That is until I saw my basement under 2 inches of water...insurance is a pool of resources to help people out when they have an unexpected loss not a bank account.

"Im not going to start making claims because I'm unemployed. I mean, it makes me no money" -- well looks like someone missed the "logic boat".... The issue isn't whether companies think you'll make money off of them in the form of income. The concept makes sense because 1. Lower credit scores show a lower likelihood that an insured will be able to take mitigating action to prevent a loss by replacing and updating their home. 2. Smaller losses , that people with good scores might just absorb on their own, will more likely result in a claim as liquidity is an issue for lower credit scores or they wouldn't be in that position. This was a terribly one sided job of reporting. There was clear intent to only deliver one side of the argument that wasn't even convincingly presented.

While I am morally opposed to the use of credit score as a rating factor, I also think we all have to look at the big picture here. "Replacement cost" is a relatively new term in the insurance world. In the old days, home insurance paid the actual cash value of a property if it burned down. Of course in those days, people saved up for a home before they purchased it. THings have changed. Consumers now carry huge amounts of debt, even into retirement. Guess who has an interest in making sure you're home is insured for its "replacement cost"? It's not the insurance company, its the bank who holds your mortgage. Guess who won't approve you for that mortgage without insurance naming them as first payee, with a replacement cost endorsement? The bank who holds your mortgage. And finally, guess who won't even give you that mortgage if your credit score is terrible? The bank.

My point is this - it makes sense to all of us that if you don't manage your money properly, if you take on more debt than you can handle, that you won't get the best interest rates on loans and mortages. WHy would you get the best insurance rates, when it is the bank that insists you have insurance in the first place?

Let's assume you have an excellent credit score, are you willing to pay higher insurance premiums to offset those who have a low score? Would you be willing to pay a higher interst rate on your mortgage so those with poor credit could get the same rate? I'm not so sure that I am. It appears that is our only option, because at the end of the day, insurance companies, whether using credit score or not, have to make money. Fortunately, as consumers, we have freedom of choice. We can research which companies use this practice, and which ones don't. Rest assured, the companies who are not using credit score are now being anti-selected against, and will end up with a book of business that may suffer worse-than-average losses, which can only lead to one thing, a premium increase.

Home Insurance is a financial product like a mortgage and if you have a bad credit score your mortgage rate will increase on renewal - this is no different. What kind of reporting is it that automatically takes the side of "i don't believe it" when she is advised that actuaries have determined a link between bad credit scores and higher losses? and the counter arguments she puts on the air are a broker, minister and a guy in the mall saying they don't believe the insurance companies research but without doing any research of their own - Classic.

GO FOR IT CO-OPERATORS..if I have great credit score...I want the discount!! They forgot to mention that! If you can't get a loan,or financial assistance there is a reason...you have not paid your bills...take care of your commitments...and you have no problem...fall behind and it will catch up with you...also this is just one element of the rate you get...CBC you missed the point..or you didn't TRY to get it..you just wanted a story for your wrap up episode! Shame on you Marketplace!!!! Linda from Alberta

Our insurance has just come up for renewal and during the past year our insurance company has called us about allowing them to do a credit check. We do not agree with this. If we were borrowing money then by all means do so but I am buying insurance, if I default on my payments then cancel my insurance. When speaking with the insurance company (The Co-Operators) they informed us they were one of the last companies to put this into effect-a lie. I have asked over 20 people if their insurance company did this and all 20 had never heard of such a thing. When I asked if my rates would go up or if we would be declined our renewal the answer was "no" again a lie. Our house premium more than tripled and we lost our previous discounts with respect to our vehicles. When I called the company again they now said that if we did not agree to a credit check we would be "considered to have the worst credit rating and charged accordingly". I then asked if I would be rewarded by a decrease in my rate with an excellent credit score and they said "no". We have never missed a payment nor made any claims and we are being penalized. This company has continually lied to us on multiple occasions. I have asked for the references for all the 'studies' supporting this method of calculating premiums and I am still waiting.
The Co-0perators has had the opportunity to explain and have yet to do so. Every person you talk to there gives the same one line..."studies show people with poor credit will eventially default on their premiums". This explains nothing and they clearly, after many months can not provide me with the studies this is all based on.
So Brad , you feel the Co-opertors is being unfairly treated, I say it is justified. It is the consumer who is again being unfaily treated and robbed. If this is allowed to continue, what industries will have 'studies' done to show they can charge the consumer more for a service 'just in case'? We are definitely going elsewhere.

I work in the industry. It does happen but before even giving someone a quote over the phone we clearly read a statement that informs the consumer that their credit score may be used. I find it interesting that David Frederick cannot take ownership in the fact that he did not read the literature Co-Operators sent him indicating the changes to his rating system. Right, Wrong or Otherwise, they did send out information. If he felt it wasn't enough information, maybe he should have contacted his company and asked for more detailed information. I also thought it was interesting that the last gentleman they interviewed mentioned he found an insurance company that doesn't use credit scores, yet they didn't disclose who that was. A+ on presenting all the facts - BOO!

When co-operators asked my permission last July to check my credit score I told them no. When I got my renewal dated March 17th 2010, my insurance rate on my house went from 474.00 a year up to 1,527.00 a year.I talked to them and they told me because I didn't give them permission to check my credit score was the reason for the increase. I work for the government so there is no problem in paying my premium. It's no business of the insurance co. to know what my credit score is. I have cancelled my insurance with co-operators and will tell everyone I can about their policy. I am now with caa.

Okay, you're 'rich'. To you I suppose I would be classed as 'poor'. My husband and I had financial troubles due to job layoffs so we had to go bankrupt.

Even then we paid our bills the best we could for 2 years before claiming bankruptcy. Does this mean we're bad people and should be 'punished' for losing our jobs when we never made an insurance claim...ever??

We have a clean slate, a fresh start, but still aren't 'rich'; probably never will be, and we're both good with that reality. I think before you judge people with so called 'bad' credit, you should step down from your social pedestal and see how REAL people live.

I suppose my comment's a bit more than required; it's just sad that we live in such a judgmental world where so much is based on numbers rather than who we really are.

Yes insurance companies use credit rating, 99% of the companies do. It is a proven fact that statistically (which is how ALL insurance rates are determined)people who have a bad credit rating are more likely to have a claim, and that claim will be larger then normal. The only people that are adversely affected are those with a very bad rating or those that refuse. Less then 10% of the country fall in this category. Similarily, if you have a spectacular rating your rates will be less, again a very small percentage. If you don't like it, get a better credit rating

We refused and our home insurance increased by about 90%...after a phone call telling us that it was voluntary and a no would have no consequences...this was one year after chancing our insurer for a better deal.
Thanks co-operators

Sounds to me that it is discriminatory to base your insurance on your credit score

James - I agree that there should have been more to the story on why rates have changed. Some people actual use their property insurance as a maintance contract on their home.

Kathleen - Sounds like you have inside knowledge of insurance companies too. Not only do insurance companies use credit score to decide whom they insure they also use credit scores to decide whom works for their company. Wendy Mesley - I did not hear you report anything about that either. Why not try asking some people whom have declared bankrupcy if any major insurance company would hire them.

I have my insurance with the Co-operators and will remain to do so. Your views are askew, I am in the actuary field and know that increases are not just based on credit status alone, most people don't realize rising costs and claims payouts are much larger. Do you have a finished basement? There's a lot more now that ever with people expecting the coverage. Check your stats.

I am appalled at how CBC aproached this. I work in the insurance industry and one only has to look at the real statistics to see why rates are increasing. Credit score is only a minor rating issue, the claims payouts for weather related and fraudulent claims is hugh. And why singling out the Co-operators as they are the one Canadian Company that is being honest in telling people credit score is being used. AS it was stated earlier, most companies have been using it for years. CBC you should have done more professional research and not grabbed for the sensational spotlight!

Sounds like James is in the industry - if you are, you know better. I know first hand credit scores are used for both auto (which is illegal) & property clients(not yet illegal but hope it soon will be). After 37 years in the industry I finally had enough. Tired of working in an industry that tells the public "we're here when you need us" while, at the same time, ripping them off! That's the whole picture as far as I'm concerned.

Credit scoring is just one factor in rating and has been clearly proven as an indicator of claims. It is not a "pretty" factor (like young boys vs girls car insurance) but is reality and if most companies are using it others cannot fairly compete as they end up unknowinly writing riskier business others have turned away. The Co-operators is being unfairly singled out here and only because they are an Canadian insurance industry leader who have stood up and said publicly they are now reluctantly using it as they have no competitive choice instead of lying to their clients as a previous blogger who said he was a broker admitted. Instead of trying to pit the company against a client on National TV why not let them have a chance to explain why it is being used as they asked??? Oh yah, that won't sell ads will it?

The current ongoing economic melt down and the first ever worst hit economic recession in this decade made every people like small business owners, low and medium income group people life become very difficult to sustain or cope up with the pressures they are getting from allround the corners.

The Government at Federeal and Provincial should also come out to help the people who have lost the jobs with this kind of situations. Although the economic recovery is slow many Canadians are still finding it difficult to get the job as the employment market scneraio is still not improved. The employment insurance is one such kind of solutions we have but that is not enough to cope up with high rate of job losses.

The employment market scenario in all the sectors of industries are slowly improving but it cannot accommodate each and everyone who lost their jobs. For example currently for one job vacancy a minumum of 250 to 400 people are applying and this due to backlog in the job market.

Given these circumstances the Government of Ontario and the Federal Government at Ottawa should work out with some policy guidelines by sitting together with various Employment Agencies, Employers, Business Men, Community People etc., to find out ways and means to ease out the Citizens problems at this point of hour.

I agree James, lets see a report on the under lying issues behind increased rates, like storm severity and climate change, rising contractor fees and building code changes.

My rates went down not up...I was told that I had I good credit score... I checked with the credit score company... I am rich I pay my bills and do not have a high debt load... I do not want to pay higher rates for the people that bad credit....

Rising rebuild costs of homes, increase in claims, and payouts for water damage now exceed $50,000 don't have a factor in increases?

Look at the whole picture, rather than a sensationalist point of view.