Auto Insurance No Longer Rated based on Credit Score in Florida

[Abel007]

I have no links for you guys and it could still be overturned. (You know how insurance companies are) but if it stands, insurance scores in the state of Florida will no longer be allowed when getting auto insurance. This goes into effect September 1st, 2006.

 

[BigJ]

And it wouldn't suprise me to see increased insurance premiums now.

 

[Abel007]

I'll let ya know if I see any. 🙂

 

[iamwiz82]

Originally posted by: BigJ
And it wouldn't suprise me to see increased insurance premiums now.

Probably, watch for it on your next renewal.

 

[halik]

What do you think will happen when the insurance companies cannot increase premiums on delinquents? They'll increase 'em across the board. Econ FTW (FTL?)

 

[BigJ]

Originally posted by: iamwiz82

Originally posted by: BigJ
And it wouldn't suprise me to see increased insurance premiums now.

Probably, watch for it on your next renewal.

I don't need laws like this to get raped on my insurance premiums...

I'm a self-insured 20 year old male and a resident of NY!

 

[cKGunslinger]

I just got a letter from the Florida Attorney General about a Class-Action lawysuit against Progressive and some rate hike issues.


In retrospect, that has nothing to do with this thread, but it reminded me of it - lol.

 

[QED]

Haha... insurance companies will probably get the last laugh when they just raise the rates of everyone and justify it as their uncertainty costs have now increased.

 

[Abel007]

Originally posted by: cKGunslinger
I just got a letter from the Florida Attorney General about a Class-Action lawysuit against Progressive and some rate hike issues.


In retrospect, that has nothing to do with this thread, but it reminded me of it - lol.

This interests me. I haven't heard about this yet.

Back to the topic, I don't think credit scores should have a darn thing to do with my ability to drive a car responsibly. Thus I support this law (even though I live in GA ha).

 

[brandonbull]

Originally posted by: Abel007

Originally posted by: cKGunslinger
I just got a letter from the Florida Attorney General about a Class-Action lawysuit against Progressive and some rate hike issues.


In retrospect, that has nothing to do with this thread, but it reminded me of it - lol.

This interests me. I haven't heard about this yet.

Back to the topic, I don't think credit scores should have a darn thing to do with my ability to drive a car responsibly. Thus I support this law (even though I live in GA ha).

Insurance companies say their statistical data shows people with lower credit scores file more claims.

 

[QED]

Originally posted by: Abel007

Originally posted by: cKGunslinger
I just got a letter from the Florida Attorney General about a Class-Action lawysuit against Progressive and some rate hike issues.


In retrospect, that has nothing to do with this thread, but it reminded me of it - lol.

This interests me. I haven't heard about this yet.

Back to the topic, I don't think credit scores should have a darn thing to do with my ability to drive a car responsibly. Thus I support this law (even though I live in GA ha).

Actually, studies have shown time and time again that your credit score does correlate with your being able to drive a car responsibly. It's not a very strong correlation, but it is there nonetheless...

 

[halik]

Originally posted by: Abel007

Originally posted by: cKGunslinger
I just got a letter from the Florida Attorney General about a Class-Action lawysuit against Progressive and some rate hike issues.


In retrospect, that has nothing to do with this thread, but it reminded me of it - lol.

This interests me. I haven't heard about this yet.

Back to the topic, I don't think credit scores should have a darn thing to do with my ability to drive a car responsibly. Thus I support this law (even though I live in GA ha).

I think the idea was that your credit signals the probability of you being late, miss payments etc.

 

[dullard]

Originally posted by: QED
Actually, studies have shown time and time again that your credit score does correlate with your being able to drive a car responsibly. It's not a very strong correlation, but it is there nonetheless...

And that is just half of the picture. Those who have a good credit score are far less likely to make a claim than those who have a bad credit score. And really, insurance isn't about the number of accidents, it is about the number of claims. Those with bad credit scores cost the insurance companies far more.

 

[Abel007]

If I miss a payment then I should have no insurance. Problem solved there. And that correlation between bad credit and driving has to be almost nill.

 

[QED]

Originally posted by: Abel007
If I miss a payment then I should have no insurance. Problem solved there. And that correlation between bad credit and driving has to be almost nill.

Wrong. Well, mostly.

As Dullard said, the correlation between bad credit and filing a claim is anything but nill.

 

[Abel007]

I didn't say it was nill, I said almost nill. There are plenty of drivers with GOOD credit who file claims left and right as well as people with BAD credit who never file a claim.

 

[dullard]

Originally posted by: Abel007
I didn't say it was nill, I said almost nill. There are plenty of drivers with GOOD credit who file claims left and right as well as people with BAD credit who never file a claim.

Which is why the credit score is one of many factors they consider when giving you the insurance price.

Insurance isn't about specifics. Sure you may have AIDS, several forms of cancer, and lycanthrope, but you might not ever file a health insurance claim. But they don't care about rare exceptions like that. Instead, groups of people with those problems is far more likely to file claims than groups of people without those problems.

It isn't whether you yourself are a good driver and don't file claims. It is whether people you get grouped with are good drivers and don't file claims.

 

[Abel007]

Not anymore in FL. 🙂

 

[dullard]

Originally posted by: Abel007
Not anymore in FL. 🙂

Its a sad day for many in FL. Those with good credit scores will see a ~30% insurance premium increase. Insurers actually DROP prices for those with good scores.

 

[erub]

i can tell you this much, there were a few relatively minor fender-benders that I was in a couple of years ago, and damaged my car or another..we paid those out of pocket to avoid the insurance hit..someone with a lower credit score (usually correlates to a person with less "wiggle room" economically, but not always of course) might have had to file a claim

 

[Abel007]

Originally posted by: dullard

Originally posted by: Abel007
Not anymore in FL. 🙂

Its a sad day for many in FL. Those with good credit scores will see a ~30% insurance premium increase. Insurers actually DROP prices for those with good scores.

Actually, good credit usually gives a factor of 1.0. Its the bad credit that gets a 1.5 or a 2.0 factor thus increasing their rates over people with good credit.

 

[dullard]

Originally posted by: Abel007

Originally posted by: dullard
Its a sad day for many in FL. Those with good credit scores will see a ~30% insurance premium increase. Insurers actually DROP prices for those with good scores.

Actually, good credit usually gives a factor of 1.0. Its the bad credit that gets a 1.5 or a 2.0 factor thus increasing their rates over people with good credit.

You lose. Try again.

28-year old male in Orlando, FL with a new Toyota Camry pays these rates (Source: Aug 2006 Consumer Reports):

Company: Without credit score / With good credit
Allstate: $1098 / $790
Progressive: $1127 / $782

The numbers are more like this: without credit score you get a basis of 1.0, with good credit you get ~0.7, with bad credit you get ~2.0.

You are correct that people with bad credit are harmed by the credit score. But I specifically was talking about people like me with good credit who are helped by the credit score. I don't want my insurance reductions to go away. Yes, I am selfish.

 

[Vic]

Populist garbage. All this will do is penalize people with good credit. What's next? Shall we pass laws requiring that people with bad credit be entitled to premier lending rates as well? Perhaps you should have shopped around for an insurance company that wouldn't pull up your 400 score.

 

[fitzov]

Make sense, since there is no causal relationship between my having bad credit and my having an accident. As for the argument that any weak correlation is enough, then rates based on race, religion, class, should be ok with you too. We don't need to give the credit and banking industries any more power than they already have.

 

[QED]

Originally posted by: fitzov
Make sense, since there is no causal relationship between my having bad credit and my having an accident. As for the argument that any weak correlation is enough, then rates based on race, religion, class, should be ok with you too. We don't need to give the credit and banking industries any more power than they already have.

Hell, let's take your logic even further and forbid insurance companies from considering your sex, your age, or where you live for calculating insurance rates.

Wait a minute, how about we just get rid of any consideration of anything at all, and just force insurance companies to charge the same rate to everyone regardless of age, sex, credit, claim history, etc?

I mean, why not? Just because I've had 5 accidents in the last two years doesn't necessarily mean I'm more prone to file a claim than someone who hasn't, right?