jimp
Expert Class
Posts: 291
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posted February 13, 2002 04:43 PM
Insurance Rates
Would you believe individuals' credit ratings are replacing driving records as the key factor insurance companies use in issuing and pricing auto policies? In one of the most indefensible practices ever introduced by an industry, auto and home insurers are using stats showing people with good credit file fewer claims -- and slapping those that have less stellar credit with premium hikes or outright cancellations. No kidding -- you could have totaled yours and someone else's car yesterday, but if you have good credit, you can end up paying less for new coverage today than someone with a perfect driving record and poor credit. That's what I call a real disincentive to bad driving if ever.
  
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pat830
Expert Class
Posts: 135
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posted February 14, 2002 11:10 AM
Boy, does that sound illegal or at least underhanded.
I guess the insurance companies have a good lobby in Washington.
We could sick the AMA on them, but of course they would want more money.
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DoubleAught
Novice Class
Posts: 45
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posted February 14, 2002 11:15 AM
Updated version of redlining, as deceitful & unethical now as it was then.
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ROCKET J
Zone Head
Goes to water over a dummy!!!
Posts: 602
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posted February 14, 2002 01:16 PM
Nobody ever does anything about anything!
Progressive will not even give you a quote without a credit check.
Rocket
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If I get any smarter, my head will explode!
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redelk
Moderator
Please... speak to the hand.
Posts: 3212
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posted February 14, 2002 03:14 PM
SAY WHAT?
Straight from Progressive's website...
Insurance companies use a variety of factors to assign a rate to a policy. In addition to using traditional rating information, like age, marital status, driving record and type of vehicle, many auto insurance companies, including Progressive, use financial responsibility information in their rate calculations.
A consumer's financial responsibility is determined by the consumer's credit information provided to us by a credit reporting agency. We will not see your actual credit report during the quoting process. The information is ordered through an automated system and interpreted by our quoting system is in the form of a financial responsibility "score".
The score is then integrated into the rating computation. When we use financial responsibility as a rating tool, we are only concerned with the grouping into which a consumer falls based on the information collected by the credit agency, and whether this results in a change in the consumer's rate.
Auto insurers use financial responsibility information because there is a strong correlation between financial responsibility and auto insurance losses. The financial responsibility information that we review focuses primarily on bill-paying behavior, not credit-worthiness. Using financial responsibility allows us to assess risk more accurately and offer consumers the best possible Progressive rate.
I have spent half the afternoon speaking with both my insurance agent and also with a "connection" I have with a leading "unnamed" national credit reporting agency. I will talk with this "connection" again tonight.
There is a POSSIBILITY that if you shopped around with several different insurance providers, it could ACTUALLY LOWER your credit rating score. It depends on the the level of infromation requested by the insurance company, but it could affect your score by up to two points... PER INQUIRY!
You check with 5 different insurance companies, it could add up to TEN POINTS! These changes in your "score" will remain on your credit report for up to SIX MONTHS! I will know more details on the, this evening.
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jimp
Expert Class
Posts: 291
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posted February 14, 2002 03:51 PM
Beacon score ?
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