A Toronto woman said she was still grieving her husband’s death last month when she learned that her insurance company had increased her premiums.
“It really touched me because we’ve been with that insurance company for 19 years — 19 years and we’ve never filed 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 passed away 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 death, the government, financial institutions and I thought I should tell my insurance broker too,” she said.
But not long after contacting her insurance company, she was told that her home insurance premiums would increase $144 annually and that she would be required to pay a prorated $47.52 immediately.
The reason? Her husband’s credit score was slightly better than hers.
“I can’t believe I’m being charged for this,” she said. “Especially when you’re grieving the loss of your soul mate and they keep this with you and it’s not necessarily the money, it’s the principle.”
Your credit score is an important financial indicator usually used to tell lenders if you are considered a good credit risk, but increasingly, insurance companies are using credit information to determine how much they charge for home insurance as well.
“Many insurance companies will use credit scores to determine your home insurance premiums,” Anne Marie Thomas, director of Consumer and Industry Relations, at the 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 percent of the insurance market has agreed to the code.
It’s another reason to make sure your credit history and credit score maintains a good reputation.
“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.
Wawanesa senior communications specialist Brad Hartle told CTV News in a statement: “We extend our sincere condolences to Ms. Waterhouse for her loss. After speaking with her broker, we have issued a refund to Ms Waterhouse for the additional premium charged to her. “It is not our intention to increase the premium in such circumstances. We will also contact Ms. Waterhouse directly.”
Waterhouse said she now plans to shop around and check insurance quotes with other companies.
Not every insurance company uses credit scores to determine how much your home insurance premiums should be, so if you’re unsure about the policy, ask your insurance company to find out.
While insurance companies can use credit scores for home insurance purposes, they need your approval first, and if you decline, you may be charged a higher insurance rate than if you agreed to a credit check.
Insurance companies are not allowed to use credit scores to calculate how much you will pay for auto insurance.