The new year is bringing big changes to Florida's insurance industry. Insurance companies can no longer use credit history as the sole reason for denying someone coverage on their car or home.
State legislators say they wanted to limit the affect credit history has on Florida consumers, in turn upholding a right that is denied to thousands of Americans
In December, Marilyn Swearingen's 19-year-old daughter applied for homeowners insurance, but was denied because she had no credit history. Swearingen says it was a headache because they had to start the loan process all over.
"We were surprised that just because she had no credit she couldn't get insurance, so I had no alternative but to go another route so we put the house in our name and insurance in our name,” says Marilyn Swearingen.
State legislators say denying coverage based on credit is a form of discrimination so they sought to change it.
Agents of specialty insurance agencies say for those with less than perfect credit their driving record, type of car they drive, age and sex are now among the factors determining whether or not their granted coverage. Insurance agencies say the law will help those who may have been in a financial bind at one point, but left a permanent scar on their credit history.
"The insurance company says there's a direct relationship between the number of claims and a person's credit score. If you have bad credit it's a reflection that you have financial problems," says Curtis Tyre.
Tyre says the law will only affect a small number of people, but that percentage says it makes a huge difference.
"I think it's the way it should be. I don't think you're credit should have anything to do with getting insurance," Swearingen says.
Credit history may still be a factor in the amount you pay for insurance, it's just can't be the premise for denying an application.
People who were denied coverage will be able apply again for those who do not have a current policy, but for those who are currently covered by a policy, they'll have to wait until it expires before they can change it.