Health Insurance is Mandatory
Auto, home and health insurance are mandatory for Californians due to the force of law. The law requires auto insurance for anyone who chooses to drive. Homeowner’s insurance is compulsory in order to get a mortgage to purchase a home. Since January 1, 2014, federal law now also mandates individuals to have health insurance coverage.
Government Must Make Sure Prices are FAIR
Since auto, home and health insurance are mandatory, the government has an obligation to guarantee that the insurance is affordable, available, competitive and fair.
Insurance Industry Price Gouging Tricks
The insurance industry has tried to make credit and insurance history factors in auto insurance rates and coverage decisions. While current law and regulations have blocked their use so far, the insurance industry wants to change the rules of the game. Auto insurers have also used a lack of continuous coverage as an underwriting factor that makes coverage even more expensive for people who are already struggling to maintain their policy.
Home insurers have also attempted to use credit history to set homeowners insurance premiums, and the credit scoring industry (FICO) has developed a whole new credit scoring model for the health care industry, which is a serious concern for health insurance policyholders. It’s morphed into a new type of credit scoring for patients.
No one should pay more or otherwise face discrimination when purchasing coverage that’s mandatory like auto, health and home insurance, just because of past financial troubles, especially when those records are often inaccurate. A Consumer Reports study found that more than half of credit reports contained mistakes with the potential to result in a denial or high cost of credit. These include mistaken identities, misapplied charges and uncorrected errors.
Prop 45 Ensures FAIR Pricing
Proposition 45 ensures that insurance prices are fair by prohibiting insurers from using consumer credit history and prior insurance history as a factor to set premiums or make coverage decisions. The initiative restates existing law banning the use of prior insurance in auto insurance and applies it to home and health insurance, and explicitly bans the use of credit history in all three mandated lines of insurance.