Rant Mode: ON - Insurance company practices

[dullard]

Originally posted by: TheAdvocate
I haven't argued that it's meaningless to them. The point is, its irrlevent from the consumer's standpoint and therefore an unjustified invasion of privacy.

Why is it irrelevant? Consumers with good credit scores get 10%-30% discounts compared to the rates they paid before this info came out. I have good credit scores. I want my 30% discount. Sure I can ask them not to get my credit score and then pay 30% more for the same product for the same company. But why? It is relevant to me, I want my savings.

Sure, there is the opposite side too. Those who are horribly irresponsible with their money pay 30%+ on their premiums. This is often harmful to certain races. So some states looked into this issue. For example, that same article mentions Texas and Oregon looked into it. Their conclusion?

But Texas concluded it had no legal authority to prohibit scoring, because a follow-up study presented in 2005 confirmed the strong relatioship between scores and claims. 'Credit scoring, if continued, is not unfairly discriminatory as deined in current law because credit scoring is not based on race.'
...
In Oregon, insurers can use scoring only with new customers, not existing ones who have a track record.

Sounds to me like Oregon has it right. Credit scores CAN be used to give new customers like me savings. Then once you know the history of claims, use the history of claims instead. Seems like a great solution to me.

 

[TheAdvocate]

Originally posted by: dullard

Sounds to me like Oregon has it right. Credit scores CAN be used to give new customers like me savings. Then once you know the history of claims, use the history of claims instead. Seems like a great solution to me.

I don't think they should ever be allowed access to your credit report, but perhaps limiting it to never previously insured customers (rather than a new customer to a particular company), would be a workable compromise.

 

[QED]

Originally posted by: TheAdvocate

Originally posted by: dullard

Sounds to me like Oregon has it right. Credit scores CAN be used to give new customers like me savings. Then once you know the history of claims, use the history of claims instead. Seems like a great solution to me.

I don't think they should ever be allowed access to your credit report, but perhaps limiting it to never previously insured customers (rather than a new customer to a particular company), would be a workable compromise.

Again... why are so upset that an insurance company (that you selected) might ask to pull your credit yet not upset that any slumlord can do the same?

I really don't understand all the people bent out of shape over a request for a credit report-- it's not like it holds the PIN to your super secret savings account or the names of people you've fantasized about sleeping with. Not that I'd want just anywone looking at it... but it does have its legitimate uses and insurance risk analysis is one.

 

[imported_surferdude]

CROOKS i say all INS companys are.

look at my credit all you want just quit raising my rates 50-120% every F'ing year.

2004 2200.00
2005 3400.00
2006 est 4800.00 this is what agent perdicts its going to.

 

[QED]

Originally posted by: surferdude
CROOKS i say all INS companys are.

look at my credit all you want just quit raising my rates 50-120% every F'ing year.

2004 2200.00
2005 3400.00
2006 est 4800.00 this is what agent perdicts its going to.

:shocked:

What kind of insurance do you have?

I pay maybe $1200 a year for full coverage for my wife and myself, as well as a very large homeowner's policy.

 

[bctbct]

I just got notice that Progressive insurance is involved in a class action lawsuit because they raised or denied insurance based on credit score.

 

[Fingolfin269]

Originally posted by: Queasy

Originally posted by: TheAdvocate
The Insurance companies pull your credit and place the score into an "insurance score" that they use to price your premiums. The credit score portion reflects your repayment ability. This is verbatim from my state government's department of insurance. I told him there is no loan and there is no matching principle of risk to provacy invasion. Instead of disagreeing with me, he said "well they dont penalize you for it, they just offer better rates to people with better scores" 😕

And this is true. The better credit rating you have = the less risk you are likely to pose to the insurance company which results in a better premium for you.

Could someone please, for the love of God and all that is Holy, show me some study SOMEWHERE that directly correlates a FICO with a person's ability to be risky in life? Is someone more likely to burn their house down if they filed bankruptcy? Is someone more likely to commit fraud if they skipped out on some student loan payments a few months after college?

I submit once again that the primary reason the insurance companies look at a credit score is so they can come up with an excuse to increase your rates.

Let me ask you this, how many of you have a lower premium with some sort of 'great credit rating discount' bonus? I thought not...

 

[Fingolfin269]

Originally posted by: JS80

Originally posted by: dullard
I'll quote some of that article:

In the 1990s...statistical analysis of archived data from more than a million credit files found that 30 of 100 or so items in the reports correlated with payouts.

A study conducted in 2000 by James Monaghan, a reasearch strategist at Metroplitian Property and Casualty Insurance Company, found, for example, that people whose oldest account on their credit report dated back 25 to 29 years subsequently filed only $60 worth of claims for every $100 of premiums paid over the next three years. But people whose oldest account was only a year old filed $95 in claims per $100 of premiums over the ensuing three years.

...

"People with a pattern of irresponsible financial behavior and poor credit history have a much greater chance of being in an accident or filing a claim."

5% profit vs. 40% profit. And that is just one of those 30 important factors in your credit report. Are you really going to argue that this is meaningless to the insurance companies?

wow....pwnage of the year

game set match

/thread

Listen, I'm all for a good study, hell I really want one in this case, but quoting a study that was conducted by an insurance company and acting as if it is the 'game set match' is just dumb. That's like taking a study conducted by a political party that concludes their political party is the best. Also, maybe my reading skills have dulled this late in the afternoon, but doesn't that study just state that someone who has been with a company longer is less likely to file a claim? That is using claims history. The other sentence that calls out credit history vs. accident potential is just a statement and I see no statistics to back it up.

1) You don't really get a discount. You get the new 'base' rate and everyone else is penalized based on their credit score/claims history above that 'base' rate. They may market it as savings but let's not kid ourselves. Insurance companies are around to make a profit and all they have to do is make sure their base rate is comparable to other insurance companies. They couldn't care less what your rate is next to someone with the worst credit score on the planet.

2) Could McDonald's start asking people for their credit report? The reason I ask is that apparently fat people will sue McDonald's and claim they made them fat, therefore they are more risky customers than skinny ones and should probably pay a little more to help pay for potential future lawyer fees. They just have to make sure to pull everyone's credit report because that way they can't be sued for discrimination.

 

[imported_surferdude]

Originally posted by: QED

Originally posted by: surferdude
CROOKS i say all INS companys are.

look at my credit all you want just quit raising my rates 50-120% every F'ing year.

2004 2200.00
2005 3400.00
2006 est 4800.00 this is what agent perdicts its going to.

:shocked:

What kind of insurance do you have?


thats only my homeowners policy thru state farm.
i also have 6 cars/trucks with them.

its high because of all the hurricanes(florida)



I pay maybe $1200 a year for full coverage for my wife and myself, as well as a very large homeowner's policy.