If your policy goes up for some inexplicable reason it may be your credit score to blame.  The use of credit ratings to calculate premiums has been a sore point of contention between insurance carriers and their customers for a few years now.

In the auto and property insurance industries especially, some companies have determined that there is a statistical correlation between a bad credit score and a higher frequency of claims.

While on the surface it may seem unfair, people need to accept the reality of the situation because most states allow it’s use and the courts have ruled in favor of the carriers when litigation over the subject has arisen.

There are a few things everyone can do to help themselves.

It is always important to check your credit report. The three main credit reporting agencies all offer you one free report annually. Discrepancies may show up from time to time that you may not even be aware of.

Also, be sure to visit our debt management section from time to time for important tips on keeping your credit score high and for ways to rehabilitate it, if your score is not so good.

Shop around. Companies all have different methods of calculating premiums. So, even if you do have bad credit, another company may give less weight to your credit score than your current carrier.

On the bright side a good credit rating supposedly helps lower your premiums, at least that’s what they claim.

With an uncertain future for the economy, is life insurance the smart move? Usually during troubled times and a falling stock market, investors would retreat into the bond market for safety.

However, the bond market may be the last place to seek shelter right now. Trouble in the bond insurance market and the downgrading of some the largest firms in the industry has not only put a damper on new issuance but has devalued all of the bonds they currently insure.

The insurance industry has been doing fairly well amidst the chaos currently embroiling most of the financial sector. John E. Girouard, the founder of the Institute for Financial Independence, say’s that whole life insurance is the way to go in the article ‘The Investment Bomb Shelter for Scary Times’.

“Few people know that the life insurance industry was one of the few economic sectors to survive the Great Depression intact. It was one investment that kept its promises.”

“Buying a policy from a mutually-owned company, you become an owner instead of a customer. It’s like becoming your own bank.”

Whole life is just one aspect of life insurance that is doing well, annuities are also staging a strong comeback as sales grew in the third and fourth quarters last year.

The characteristic that makes life insurance attractive right now is their ironclad guarantees, not to mention their favorable tax shelter implications. While they may not offer the highest returns that other investment vehicles might, there is no fear of loss like in the stock and bond markets.

Insurance companies don’t like it when you file a claim. Some may even take the extreme measure of canceling your policy all together once it lapses. Since insurance isn’t regulated at the federal level, whether this is allowed or not can vary from state to state.

In Delaware, the Superior Court ruled for the insurance industry against the state’s insurance regulator concerning this type of scenario.

“A Delaware Superior Court has ruled that the state’s insurance regulator overstepped his authority when he prohibited property insurers from refusing to renew a homeowner policy based solely on whether the insured had filed a recent claim or made an inquiry.”

The regulator in this case issued a regulation calling this type of act an unfair trade practice when that state’s legislature was unable to pass a law that would have made it illegal. It remains to be seen if they will rectify that or not.

This is nothing new however. The industry has always been looking for ways to minimize its risk exposure, much the dismay of their customers. Companies have even left entire regions that they deemed too costly to do business. For this reason there has been much more scrutiny lately over their recent profit levels.

Nonetheless it can be quite disconcerting to have your insurance carrier drop you for actually needing the policy you paid for. Be sure to inquire with your state’s insurance commission to determine what course of action might be open to you.