Rant Mode: ON - Insurance company practices

[TheAdvocate]

Originally posted by: EagleKeeper
Insurance is based on the expenses/exposure of risk of a claim.
Premiums reflect such risk.

If you do not like the way the insruance company determines the risk, then go to another.
You may end up paying a higher premium accodingly and/or not having insurance.

Self insure if you do not like the rules.

...or option #4 - fight the system by creating a grass roots privacy campaign, which i'm seriously considering doing. I've been talking to some colleagues about the issue for a while (about cell phone companies too). There's an enormous lobby to battle, but the difficulty of the fight shouldn't and doesn't effect whether or not we should do it. My credit is fine. I would just barely have standing in a lawsuit. I'm just sick of the practice.

 

[QED]

Actually, insurance is, in my opinion, a legal form of gambling... pretty much like lending.

Lenders want to know as much about the risk they are taking on as possible before approving you for a loan. Higher risk = higher interest charges.

Why is it so unreasonable for an insurer, who is taking a risk on you, do the same? I'm sure there are studies out there that show people with lower credit scores have higher rates of filing claims than those with higher scores...

 

[thomsbrain]

considering you pay in advance for insurance, this is bull.

people's cell phone comparisons are inaccurate because with a cell phone, you pay AFTER using the service, so they are essentially giving you credit on it throughout the billing period. they ARE giving you a loan. with insurance, you pay upfront, so there is no credit involved whatsoever.

 

[JEDIYoda]

Originally posted by: jadinolf
Hard to believe but they associate your credit rating with your ability to accept responsibility.

Ridiculous, isn't it?

Thast probably the best answer I have seen in a long time.
And its very true.

Interesting post there. Where exactly are they offering me credit? Insurance is pay as you go. No pay = no insurance. I miss a payment, they cancel it the next day. Why then is my credit score even relevent?

What was posted was not flame bait it was the absolute truth.
So don`t get offended. You were the one seeking possible reasons why?

 

[QED]

Originally posted by: thomsbrain
considering you pay in advance for insurance, this is bull.

people's cell phone comparison's are inaccurate because with a cell phone, you pay AFTER using the service, so they are essentially giving you credit on it throughout the billing period. they ARE giving you a loan. with insurance, you pay upfront, so there is no credit involved whatsoever.

I don't think the insurance companies are worried about you not paying your bill. That's not why they are pulling your credit.

Just as with auto insurance, people who tend to shirk financial responsibilities tend to be reckless in other aspects of their life as well-- which leads to higher claims, which is why it might be relevant.

 

[JEDIYoda]

Originally posted by: waggy

Originally posted by: TheAdvocate

Originally posted by: waggy
actually wrong.

you can have the house insured for more then its worth.

So what? That's what you paid for. What you owe on the house doesnt matter at all. Their liability is limiuted by the amount you insured, an amount that you pre-negotiated and are paying a premium for. The quote I just got had an additional premium for 125% replacement coverage. I'm paying for, I get it. What I owe on my home loan is irrelevent.

sigh nevermind. i see you refuse to see other argumetns on WHY they need to check out the credit for it.
fight the man though! don't get insuranceon the house!

Agreed! He should not have even posted if all he was going to do was be closed minded and argue with people who are trying to help!!

 

[EagleKeeper]

Originally posted by: thomsbrain
considering you pay in advance for insurance, this is bull.

people's cell phone comparisons are inaccurate because with a cell phone, you pay AFTER using the service, so they are essentially giving you credit on it throughout the billing period. they ARE giving you a loan. with insurance, you pay upfront, so there is no credit involved whatsoever.

You are not paying for the loss up front. You are paying to the insurance company to take on the risk of a loss.

Loss can be natural or artifical. The insurance copmanies have for a long time calcualte the risk (stanrdard premiums) for the natural loss.

The artificial loss is what they are guarding against and determining what the extra risk cost should be.

 

[TheAdvocate]

Originally posted by: QED

Originally posted by: thomsbrain
considering you pay in advance for insurance, this is bull.

people's cell phone comparison's are inaccurate because with a cell phone, you pay AFTER using the service, so they are essentially giving you credit on it throughout the billing period. they ARE giving you a loan. with insurance, you pay upfront, so there is no credit involved whatsoever.

I don't think the insurance companies are worried about you not paying your bill. That's not why they are pulling your credit.

Just as with auto insurance, people who tend to shirk financial responsibilities tend to be reckless in other aspects of their life as well-- which leads to higher claims, which is why it might be relevant.

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" 😕

 

[TheAdvocate]

Originally posted by: EagleKeeper

The artificial loss is what they are guarding against and determining what the extra risk cost should be.

Again, I counter with - then check my claims history. There are several people griping about me ignoring their points, but you're actually ignoring this counterargument.

I'm not arguing just to argue. I was hoping someone would shed some light, preferably someone in the industry. So far, the repsonses haven't made any sense.

 

[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.

And how is this privacy invasion btw? Your agreement to have the insurance company provide you a quote grants them permission to pull your credit report. This is no different from applying to a credit card or opening a bank account. You gave someone permission to look at your credit.

 

[imported_Nacelle]

I was with Allstate with my car. When I went to buy a house, I told them what I was doing. And that I needed insurance on the house at this address, I will be closing on it, on this date. I think I paid 6 months of insurance, in advance. I show up to closing and the owner hands me some mail that was being sent there already. I opened it. Allstate was sending me a letter saying my credit wasn't good enough to insure the house. So, I sitting here at with no insurance. What a pain. You can't close untill you have insurance. So, I'm calling around while everyone waits. Why would those retards send the letter to a house I don't even own yet?

 

[Queasy]

Originally posted by: TheAdvocate

Originally posted by: EagleKeeper

The artificial loss is what they are guarding against and determining what the extra risk cost should be.

Again, I counter with - then check my claims history. There are several people griping about me ignoring their points, but you're actually ignoring this counterargument.

I'm not arguing just to argue. I was hoping someone would shed some light, preferably someone in the industry. So far, the repsonses haven't made any sense.

Checking your claims history is part of your overall "insurance score". Many people have no or few claims with which to build a history. Your credit history provides additional information to the insurance company to determine your premiums. Additionally, it also helps them to ensure that you are who you say you are what with identity theft being so prevalent.

 

[waggy]

Originally posted by: TheAdvocate

Originally posted by: EagleKeeper

The artificial loss is what they are guarding against and determining what the extra risk cost should be.

Again, I counter with - then check my claims history. There are several people griping about me ignoring their points, but you're actually ignoring this counterargument.

I'm not arguing just to argue. I was hoping someone would shed some light, preferably someone in the industry. So far, the repsonses haven't made any sense.

your claims history is one part of getting insurance. but it is not all of it. WE have made some reasons why they need to pull it. you are just ignoring it.

the credit score is a good way to judge if a person is more likely to commit Freud. to bad you do not understand that.

 

[QED]

Originally posted by: TheAdvocate

Originally posted by: EagleKeeper

The artificial loss is what they are guarding against and determining what the extra risk cost should be.

Again, I counter with - then check my claims history. There are several people griping about me ignoring their points, but you're actually ignoring this counterargument.

I'm not arguing just to argue. I was hoping someone would shed some light, preferably someone in the industry. So far, the repsonses haven't made any sense.

So you want insurance companies to just purposefully ignore something that may be a pretty good indicator of future claims worths? That's like telling a prospective mortgage lender to ignore all of those late payments on your credit cards-- they should only look at your payment history on any past mortgages (which may be none).

The problem with looking at claims only is that a lot of people will have 0 claims to their name before they have a sudden, big claim so there is no information to go on.

Some information is better than none at all...

 

[TheAdvocate]

Originally posted by: Queasy

And how is this privacy invasion btw? Your agreement to have the insurance company provide you a quote grants them permission to pull your credit report.

Come again? Did I apply for a loan?

This is no different from applying to a credit card

Yes, it is entirely different. Credit card is extending me CREDIT. Insurance company is selling me a prepaid service/product.

You gave someone permission to look at your credit.

No I did not. I told the gal at Geico (not currently a customer) that I was expressly forbidding her from pulling my credit. She gave me a quote, but I know she inflated it. I was penalized.

 

[TheAdvocate]

Originally posted by: waggy

the credit score is a good way to judge if a person is more likely to commit Freud.

Freud? That's rich.

Your claims history is the way to determine if someone is likely to commit fraud. Not having history IS history. Arguing otherwise goes against the premise of innocent until proven guilty (fraud is a crime, so yes, that analogy does apply).

Your credit history only demonstrates your repayment history on credit facilities. That's it. It does not show your crominal record or likelihood of commiting fraud and to suggest it does is patently ridiculous. Especially in the light of much better evidence such as your claims history, even your general criminal history.

 

[Queasy]

Originally posted by: TheAdvocate

Originally posted by: Queasy

And how is this privacy invasion btw? Your agreement to have the insurance company provide you a quote grants them permission to pull your credit report.

Come again? Did I apply for a loan?

No you didn't. You were requesting a quote from an insurance company and part of how they determine the quote is by looking at your credit score. If you want the good rates from the insurance company, you agree to their terms.

You gave someone permission to look at your credit.

No I did not. I told the gal at Geico (not currently a customer) that I was expressly forbidding her from pulling my credit. She gave me a quote, but I know she inflated it. I was penalized.

That was your choice. If they can't verify that you are who you say you are and check to see if you would be a risk to insure, they have every right to do that.

 

[homestarmy]

Originally posted by: TheAdvocate

Originally posted by: BigJ

In the same regards, it's just like a cell-phone, but they do at the very least a soft inquiry on that.

Cell phone companies, who also aren't making you a loan, shouldn't do it either. But at least they can claim that they sell you a contract price for two years or whatever. Insurance is prepaid, for six months or whatever. To compare to cell phones, you'd have to prepay for the entire contract period.

The point I'm making here is that non-creditors are abusing this already privacy invasive service for non-credit situations. I cant remember what it was, but someone actually wanted to pull my credit for a cash transaction a couple months ago. I thought he was joking. This has got to stop. Down with corporate Big Brother.

With a cell phone plan, a low credit score might indicate that you will not pay your bill and additionally run up hundreds of dollars in charges before you have been deliquent long enough to have the service terminated.

Think. Please.

 

[TheAdvocate]

Originally posted by: QED
That's like telling a prospective mortgage lender to ignore all of those late payments on your credit cards

No it's not. Those are all credit accounts. Again, what does that information tell you that's relevant?

So far youve said two things:

1. Repayment history - insurance is not a loan.
Irrelevant.

2. Fraud - criminal/claims history is better evidence.

The potential abuse has already been posted - someone who had a bad downturn in business can have a bad credit score yet be absolutely 0% more likely to commit fraud, yet they'll get penalized for it.

 

[waggy]

Originally posted by: TheAdvocate

Originally posted by: waggy

the credit score is a good way to judge if a person is more likely to commit Freud.

Freud? That's rich.

Your claims history is the way to determine if someone is likely to commit fraud. Not having history IS history. Arguing otherwise goes against the premise of innocent until proven guilty (fraud is a crime, so yes, that analogy does apply).

Your credit history only demonstrates your repayment history on credit facilities. That's it. It does not show your crominal record or likelihood of commiting fraud and to suggest it does is patently ridiculous. Especially in the light of much better evidence such as your claims history, even your general criminal history.

innocent until proven guilty is only usefull with criminal cases not getting insurance. so no the analogy does not apply.

 

[TheAdvocate]

Originally posted by: waggy

Originally posted by: TheAdvocate

Originally posted by: waggy

the credit score is a good way to judge if a person is more likely to commit Freud.

Freud? That's rich.

Your claims history is the way to determine if someone is likely to commit fraud. Not having history IS history. Arguing otherwise goes against the premise of innocent until proven guilty (fraud is a crime, so yes, that analogy does apply).

Your credit history only demonstrates your repayment history on credit facilities. That's it. It does not show your crominal record or likelihood of commiting fraud and to suggest it does is patently ridiculous. Especially in the light of much better evidence such as your claims history, even your general criminal history.

innocent until proven guilty is only usefull with criminal cases not getting insurance. so no the analogy does not apply.

You're not very good at reading comprehension.

I would also advise you that criminal courts have very strict evidentary rules about the admissability of prior bad acts. The default rule is that they are NOT admissible.

 

[BigJ]

Originally posted by: TheAdvocate

Originally posted by: waggy

Originally posted by: TheAdvocate

Originally posted by: waggy

the credit score is a good way to judge if a person is more likely to commit Freud.

Freud? That's rich.

Your claims history is the way to determine if someone is likely to commit fraud. Not having history IS history. Arguing otherwise goes against the premise of innocent until proven guilty (fraud is a crime, so yes, that analogy does apply).

Your credit history only demonstrates your repayment history on credit facilities. That's it. It does not show your crominal record or likelihood of commiting fraud and to suggest it does is patently ridiculous. Especially in the light of much better evidence such as your claims history, even your general criminal history.

innocent until proven guilty is only usefull with criminal cases not getting insurance. so no the analogy does not apply.

You're not very good at reading comprehension.

I would also advise you that criminal courts have very strict evidentary rules about the admissability of prior bad acts. The default rule is that they are NOT admissible.

And you don't get back any money from criminal cases, which is basically all the insurance companies care about.

 

[RichardE]

The worse your credit is, the higher risk of fraud.

One of the departments in my office deals with banking over the phone. When we do interviews we pull the credit reports and people with bad credit do not get interviews, as our insurance tells us that we need indivuals with good credit to work on the banking. Same concept here, Insurance is covered in fraud, from slip and falls during the winter, to people dumping water on there floor from a garden hose and claiming flooding to get a new carpet. This is just covering there back.

 

[Stuxnet]

Originally posted by: TheAdvocate
Been calling around to get quotes on a new homeowner's policy as I've made some significant changes. Turns out that most of them won't give you a simple quote without pulling your credit.

Why in the fvck does an insurance company have to pull a credit report and ding your credit score just to give you a quote on a homeowner's policy???

What an abusive practice. My credit (which is good/excellent for the flame baiter crowd) has nothing to do with what I should pay for homeowner's insurance. It should be entirely based on the repair & replacement costs, basic risk factors (fire, etc), and local adjustments.

That whole industry is just FUBAR'd. I absolutely hate it with a passion.

You can't be serious, right? I would think it's pretty obvious that one's credit worthiness would be directly tied to their insurance risk.

 

[Queasy]

Originally posted by: TheAdvocate

Originally posted by: waggy

Originally posted by: TheAdvocate

Originally posted by: waggy

the credit score is a good way to judge if a person is more likely to commit Freud.

Freud? That's rich.

Your claims history is the way to determine if someone is likely to commit fraud. Not having history IS history. Arguing otherwise goes against the premise of innocent until proven guilty (fraud is a crime, so yes, that analogy does apply).

Your credit history only demonstrates your repayment history on credit facilities. That's it. It does not show your crominal record or likelihood of commiting fraud and to suggest it does is patently ridiculous. Especially in the light of much better evidence such as your claims history, even your general criminal history.

innocent until proven guilty is only usefull with criminal cases not getting insurance. so no the analogy does not apply.

You're not very good at reading comprehension.

I would also advise you that criminal courts have very strict evidentary rules about the admissability of prior bad acts. The default rule is that they are NOT admissible.

So we can't make comparisons to utilties, credit cards, or cell phones but you can make comparisons to the judicial system? 😕