Caught in the storm of insurance scores.(View point: THE CONSUMERS UNION PERSPECTIVE)

Most consumers don't realize that their credit history can affect their auto- or homeowners-insurance premiums. The "insurance score" that companies use differs from the credit score that lenders use for mortgages and car loans; insurance scores pluck specific items from a credit record, rather than using the complete record.

Insurance companies say that a low score is an indicator that a consumer is more likely to file a claim--in other words, that the insured will use the product he paid for. That's unfair, because having a low credit score doesn't necessarily make someone more likely to have a car accident or a house fire.

Moreover, there are real concerns about the accuracy of credit data that insurers use. Despite those qualms, many states allow insurers to include credit-based information in setting premiums; too few states protect consumers in a meaningful way.

Even though insurance companies cannot use race or ethnicity to decide who gets insurance and how much it will cost, evidence shows that insurance scores disproportionately affect certain minority groups and low-income consumers, which raises concern that scores can serve as a proxy for race or ethnicity. Research shows that people in areas with a high concentration of minorities are more likely to have lower credit scores.

The consequences are far-reaching. The economic stability of our cities and our nation depends in part on access to fairly priced coverage. Insurance is based on the concept that spreading the risk helps society protect itself from ...