Most consumers don’t realize that their credit history can affect their auto- or homeowners-insurance premiums. The “insurance score” that companies use differs from the credit score that lenders use for mortgages and car loans; insurance scores pluck specific items from a credit record, rather than using the complete record.

Insurance companies say that a low score is an indicator that a consumer is more likely to file a claim--in other words, that the insured will use the product he paid for. That’s unfair, because having a low credit score doesn’t necessarily make someone more likely to have a car accident or a house fire.

Moreover, there are real concerns about the accuracy of credit data that insurers use. Despite those qualms, many states allow insurers to include credit-based information in setting premiums; too few states protect consumers in a meaningful way.

Even though insurance companies cannot use race or ethnicity to decide who gets insurance and how much it will cost, evidence shows that insurance scores disproportionately affect certain minority groups and low-income consumers, which raises concern that scores can serve as a proxy for race or ethnicity. Research shows that people in areas with a high concentration of minorities are more likely to have lower credit scores.

The consequences are far-reaching. The economic stability of our cities and our nation depends in part on access to fairly priced coverage. Insurance is based on the concept that spreading the risk helps society protect itself from economic devastation and more quickly recover from catastrophes. When insurance costs are inflated for the wrong reasons, people are unfairly cut off from access to its protection. The whole community suffers, and those who cannot afford insurance struggle to recover if disaster hits.

Another hurricane season is already upon us. Based on past years with similar conditions, the National Oceanic & Atmos­pheric Administration estimates that two to four hurricanes could affect the U.S. in 2006. But there’s more trouble on the horizon than just bad weather. In any state that allows insurers to use credit information to rate and underwrite homeowners- and auto-insurance policies, consumers are already in the middle of a storm, and most of them don’t know it.

The devastation caused by Hurricanes Katrina, Rita, and Wilma shows us that people without adequate insurance may face compounded tragedy. Since economic losses caused by catastrophe can send a credit score plummeting, even consumers who can afford insurance today may feel the repercussions of credit scoring in their premiums tomorrow.

Consumers Union advocates have been urging legislators and regulators in several states to ban the practice, and we’ll continue those efforts.