A Toronto woman said she was still grappling with grief over the death of her husband last month when she found out her insurance company had raised her premiums.
“It really pissed me off because we’ve been with this insurance company for 19 years – 19 years and we’ve never made a claim on the car or the house,” Jo Waterhouse told CTV News Toronto.
Waterhouse said she and her husband David had been married for 41 years when he died after a long illness. After his death, she said she felt she needed to get her financial affairs in order.
“I told everyone about his passing, government, financial institutions and thought I should tell my insurance broker as well,” she said.
But shortly after contacting her insurance company, she was told that her home insurance premiums would increase by $144 per year and that she would have to pay a pro-rated fee of $47.52 immediately.
The reason? Her husband’s credit score was slightly better than hers.
“I can’t believe I’m being accused of this,” she said. “Especially when you mourn the loss of your soul mate and they stick it to you and it’s not necessarily the money, it’s the principle.”
Your credit score is an important financial indicator primarily used to tell lenders if you are considered a good credit risk, but increasingly insurance companies are using credit information to also determine how much to charge. for home insurance.
“Many insurance companies will use credit scores to determine your home insurance premiums,” Anne Marie Thomas, director of consumer and industry relations at Insurance Bureau of Canada (IBC), told CTV News Toronto.
IBC said a code of conduct was approved in 2021 to allow insurance companies to use credit information to set home insurance rates, and about 85% of the insurer market has accepted the code.
This is another reason to make sure your credit history and credit score stay in good standing.
“It’s always a good idea to make sure your credit score is good and to check your credit score about once a year to make sure there are no mistakes,” Thomas said. .
Waterhouse is insured by the Wawanesa Mutual Insurance Company.
Senior Communications Specialist Brad Hartle of Wawanesa told CTV News in a statement, “We extend our sincere condolences to Ms. Waterhouse on her loss. After speaking with her broker, we issued Ms Waterhouse a refund for the extra premium she was charged. In such circumstances, we do not intend to increase premiums. We will also contact Mrs Waterhouse directly.
Waterhouse said she now plans to shop around and check insurance quotes with other companies.
Not all insurance companies use credit scores to determine your home insurance premiums, so if you’re unsure of the policy, ask your insurance company to find out.
Although insurance companies can use credit scores for home insurance purposes, they need your permission first, and if you refuse, you may have to pay a higher insurance rate than if you accepted a credit check.
Insurance companies are not allowed to use credit scores to calculate how much you pay for auto insurance.