Fredericton, New Brunswick — New Brunswick is a province that has been getting by the best they can despite a growing financial struggle for many of its residents, but the introduction of credit scores as a factor in setting auto insurance rates in the province is leaving many New Brunswickers without an adequate starting point.
The New Brunswick Insurance Board has already approved several companies to begin adjusting rates based on credit score, even though personal bankruptcy is currently a very real problem in the province.
According to figures compiled by the Office of the Superintendent of Bankruptcy Canada, about one in 87 New Brunswick adults, 7,246 in total, filed for bankruptcy over a 24-month period ending in July.
That’s the highest number per capita in the country over those two years and about 65 percent above the national average.
In an interview with the CBC, Andrew Graham, CEO of the free online credit score site Borrowell, remarked that New Brunswick’s precarious credit position is no secret.
“When you look at credit scores across Canada and you look at scores in the largest cities, three of the bottom five are in New Brunswick,” said Graham.
Graham says that according to his website, the average credit score in New Brunswick hovers around 634. A perfect score in Canada is 900 and anything above 740 is considered excellent.
Wawanesa, New Brunswick’s largest insurer and one of the companies to be approved for credit-based rate adjustments, contended that applying a driver’s credit score is one of the most accurate ways of assessing risk in a policy.
“By including Credit Score, which has shown to be an apt predictor of risk, it will further segment our risks leading to the most just rates for policyholders,” Wawanesa said in a statement.
“Those policyholders who are likely to generate the highest costs will be charged more than those who are likely to generate lower costs.”