Jenny owes her election to the Detroit area so it means more for us to pay outstate to reward her real constituents. I can only hope that she will continue to be blocked in most of her various idiotic schemes for insurance and everything else. I wish she would move back to Canada.
Remind me again, how ones credit score is an indicator of how likely a person is to file a claim? How are “They predictive of the number of claims consumers file and the total cost of those claims?”
I just don’t get it. Can anyone explain this to me?
This was part of the article: “Credit-based insurance scoring has been proven to be an objective, strong indicator of how likely a person is to file a claim. A 2007 study by the Federal Trade Commission (FTC) found that: “credit-based insurance scores are effective predictors of risk under automobile policies,” said John Birkinbine, assistant vice president, Midwest Region. “They are predictive of the number of claims consumers file and the total cost of those claims.”
No, not really, but the numbers have proved the method over and over. People who don’t pay bills on time have much higher loss ratios in all lines. We have seen this for a long time in our company bill programs. Studies have show the validity over and over. But of course since you don’t understand exactly why it works it’s not valid.
Nobody Important, I’m not saying it’s invalid, I’m saying I don’t understand the connection. It has never been adequately explained to me. If a person has an excellent credit score & has an accident, is he less likely to submit the loss? I don’t think this is the case at all. And if he does submit the loss, the payout will likely be lower than that of a person with poor credit? It just sounds ludicrous to me. Accidents happen. This is why we carry insurance; for the unpredictible.
Company-speak is to talk about claims submitted. Real world is that people with great credit lead more responsible lives resulting in fewer losses in the first place. People who make poor decisions about their finances tend to make poor decisions elsewhere. Not all in either category, but enough to make a difference. The companies don’t care WHY that is true so long as it is PREDICTABLY true.
Also, insurers look at the same data as creditors but are looking for different factors. Like playing cards, Aces are important in both Spades, Poker, and Hearts but Spades are important in one game, Hearts in another and Poker barely cares. They all use the same deck but the rules are different.
I have to disagree with Good Hands comment about people with better credit scores leading more responsible lives. That strikes me as a very short sighted attitude. Insurmountable health care costs due to insurers dictating what will and will not be covered for life long illnesses such as Cancer, Diabetes, Lou Gherig’s, Multiple Schlerosis, and more are the first things that come to mind. What about a birth of a special needs child leaving a hardworking couple with bankruptcy as their only option? Or perhaps the 1000 year flood here in Nashville in 2010. None of us had Flood Insurance because we were NOT zoned in flood planes by the Insurance Industry and our Gov’t. But – flood we did. Losses in the millions unpaid by good hard working citizens and businesses. All of these show on your credit report for the rest of your life. And the people on the other side of the phone don’t really care WHY it’s there – it’s just that it’s there.
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Jenny owes her election to the Detroit area so it means more for us to pay outstate to reward her real constituents. I can only hope that she will continue to be blocked in most of her various idiotic schemes for insurance and everything else. I wish she would move back to Canada.
Remind me again, how ones credit score is an indicator of how likely a person is to file a claim? How are “They predictive of the number of claims consumers file and the total cost of those claims?”
I just don’t get it. Can anyone explain this to me?
This was part of the article: “Credit-based insurance scoring has been proven to be an objective, strong indicator of how likely a person is to file a claim. A 2007 study by the Federal Trade Commission (FTC) found that: “credit-based insurance scores are effective predictors of risk under automobile policies,” said John Birkinbine, assistant vice president, Midwest Region. “They are predictive of the number of claims consumers file and the total cost of those claims.”
No, not really, but the numbers have proved the method over and over. People who don’t pay bills on time have much higher loss ratios in all lines. We have seen this for a long time in our company bill programs. Studies have show the validity over and over. But of course since you don’t understand exactly why it works it’s not valid.
Nobody Important, I’m not saying it’s invalid, I’m saying I don’t understand the connection. It has never been adequately explained to me. If a person has an excellent credit score & has an accident, is he less likely to submit the loss? I don’t think this is the case at all. And if he does submit the loss, the payout will likely be lower than that of a person with poor credit? It just sounds ludicrous to me. Accidents happen. This is why we carry insurance; for the unpredictible.
Just go out and read the reports. Someone out there could probably get you the links.
Company-speak is to talk about claims submitted. Real world is that people with great credit lead more responsible lives resulting in fewer losses in the first place. People who make poor decisions about their finances tend to make poor decisions elsewhere. Not all in either category, but enough to make a difference. The companies don’t care WHY that is true so long as it is PREDICTABLY true.
Also, insurers look at the same data as creditors but are looking for different factors. Like playing cards, Aces are important in both Spades, Poker, and Hearts but Spades are important in one game, Hearts in another and Poker barely cares. They all use the same deck but the rules are different.
I have to disagree with Good Hands comment about people with better credit scores leading more responsible lives. That strikes me as a very short sighted attitude. Insurmountable health care costs due to insurers dictating what will and will not be covered for life long illnesses such as Cancer, Diabetes, Lou Gherig’s, Multiple Schlerosis, and more are the first things that come to mind. What about a birth of a special needs child leaving a hardworking couple with bankruptcy as their only option? Or perhaps the 1000 year flood here in Nashville in 2010. None of us had Flood Insurance because we were NOT zoned in flood planes by the Insurance Industry and our Gov’t. But – flood we did. Losses in the millions unpaid by good hard working citizens and businesses. All of these show on your credit report for the rest of your life. And the people on the other side of the phone don’t really care WHY it’s there – it’s just that it’s there.