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Cowdery Looks to Reform Auto Insurance

(JUNEAU) - Sen. John Cowdery (R-Anchorage), has introduced Senate Bill 320 to prevent insurance companies from using credit scoring to determine rates, and to halt the use of aftermarket replacement parts in settling accident claims without permission of the insured car owner.

This two-fold bill would first prohibit auto insurers from using credit scoring for the purpose of determining premiums or rates for auto insurance. Such scoring, Cowdery says, has no merit in determining risk exposure to the insurance company, and could be used in an unlawful discriminatory manner.

"I fully support the right of any company to protect its assets by limiting exposure to risk," said Cowdery. "However, I also believe in protecting the rights of individuals to keep personal information private. The use of personal credit information provides nothing to the insurance companies except a method to charge customers more. This is particularly true when other rating data, such as driving records, illustrate a driver to be low risk, but credit scoring, which may negatively change due to events such as divorce or decreased spending power, do not accurately evaluate a driver's risk on the road."

Second, Cowdery's bill requires insurance companies to receive consent from the consumer prior to using aftermarket replacement parts during repair work.

"An insurance company insures your vehicle and insures the parts in your car," said Cowdery. "These parts are usually original manufactured parts. If that is what is insured that is what should be replaced. Why substitute manufacture's parts with aftermarket replacements that may nullify the manufacturer's warranty and or cause unnecessary safety risks due to less- than-perfect fit? Lets replace apples with apples, not apples with oranges".

SB 320 will be heard in the Transportation and Labor & Commerce Committee. The first hearing is scheduled for Thursday, February 28th at 1:30 PM.

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