Good drivers and responsible homeowners could be forced to pay artificially high premiums if North Dakota limits the information that companies can use to write insurance policies, industry representatives say.

"The entity that's going to be least affected are insurance companies. We'll make adjustments. I don't know if it'll be popular with North Dakota consumers," said Rob Hovland, president of Central Mutual Insurance Co. of Rugby.

Hovland and other insurance executives are fighting a measure that would ban certain loss histories from the formulas used to make coverage decisions. The bill, supported by Insurance Commissioner Jim Poolman, would affect both home and auto insurance.

Poolman said the bill is an answer to North Dakotans who complain that insurance firms unfairly use damage claims that insurers do not pay - or the claims history of a previous home owner - to reject policies or raise rates.

For example, a homeowner whose roof is damaged by a hailstorm may decide not to invoke his or her insurance coverage if the damage is slightly more expensive to repair than the policy's deductible.

But that homeowner still could see higher premiums because firms record such unpaid claims and use them to determine whether to insure a building, Poolman said.

"We think that violates a fundamental fairness for North Dakota consumers," he told members of the House Industry, Business and Labor Committee.

The committee did not immediately act on the bill Tuesday. It already has been approved in the Senate, and will get a House vote.

Hovland said the measure could hurt customers who pose a low insurance risk by keeping underwriters from noticing troubling patterns in another customer's behavior.

An elderly driver, for instance, may pay for a series of small auto accidents in an attempt to hide them from insurers and licensing authorities, he said.

Under Poolman's proposal, an insurance company could not charge higher premiums if it discovered a history of repairs and found out the damage was caused by car crashes.

"I don't think it defies common sense to take that into account," Hovland said.

Pat Ward, a Bismarck attorney and spokesman for State Farm Insurance, said North Dakotans don't seem to need added protection because the state already boasts some of the nation's lowest auto and homeowner insurance rates.

"The bill addresses problems that really aren't existing in North Dakota at this time," he said.

The bill is SB2186.