It has nothing to do with law. Insurers enter into contracts. They can charge whatever the market will bear — whatever people will agree to pay. I suppose that they feel that if you are generally irresponsible then you are a greater risk. Similarly, you are free to check out the company and see if they pay their own bills on time, and decide to business with them based on that.

There are two concerns. First, can you/will you pay the premium in full and on time. Second, claims experience. Statistically, a low credit score is often correlated with both late/short/non-payment and with increased claims. Since the insurance companies can prove the statistics and since both have direct bearing on their business, it is not unlawful. (It’s similar to the very high rate for new drivers, who are statistically likely to have an expensive accident within the first 24 months of licensure.) Basically, it comes down to the math. Sorry!

Because there’s a statistical correlation between credit score and insurance claim frequency.