Insurance Companies & Credit Ratings
Is it legal for a car or home insurance company doing business in PA to base premium rates on an individual's credit rating? If so, why? Who is responsible for allowing this disgraceful gouging of those that do not have a perfect credit rating? If an individual's existing car insurance increases that individual's premium costs based on their credit rating, is that insurance company required to notify that individual of the reason for the premium increase? Finally, how can I lodge a formal complaint to the PA Insurance Commission?
It is legal for an insurance company to change your premium rates based on your credit rating. Your credit rating is one of the "risk factors" that the insurance company takes on when providing you with insurance. If you stop paying your insurance, it will take some amount of time for the insurance company to remove you from their client list. If a valid claim comes in while they still technically cover you, they would be obligated to pay it.
I don't know if there is a legal requirement for your insurance company to notify you of the reason for a premium increase. However, I would certainly expect such notification. If you didn't get it, I would register a complaint with your State's Department of Insurance.
You can lodge a complaint with your Insurance Commission, but each commission has their own procedures. I would check the website for the PA Insurance Commission and follow any procedures listed there.