I think I’m going to file a class action because as A younger driver I have to pay more. Give me a break. The only reason minorities end up paying more is because they are notorious for having worse credit, only because when they come to this country they end up over their heads with more than they can afford-they were never taught how to manage their finances. The plaintif is hispanic, so that’s what I’m referring to. Trust me, as an Allstate agent, I know we have plenty of hispanic customers who have gotten a better rate than they would have otherwise. There are some who pay more.
And to whoever mentioned medical bills, well those don’t count against Allstate’s score. And Allstate reconsiders extreme cases such as loss of employment. So, think of something new to complain about, now that the companies are refining the process to be accurate and a good predictor of risk.
and, ALL businesses are in the business of profit, insurers just earn it by managing people’s risk for a fee. That’s obvious.
Oh, and insurance isn’t a socialist product, it isn’t ment to be less expensive for low income people, it’s ment to be less expensive for low risk people.
We’re a united country, with a Federal system of government, which means each state is a member of the union with its own law making power. Why not, then, just call states counties and take away all their law making power? that’s not how it works.
The problem with credit scoring that makes it discriminatory is that those who started out in a better over-all situation are rewarded for already being there. When you start out above the even point, its easier to stay there. When you start out in the negative, its harder to get above the even point, so you’re penalized when you attempt to employ strategies to get there.
Many people with low credit score are trying to improve them but are penalized to the point they can’t – higher rates because in the past you didn’t pay timely is not a way to educate people to pay their insurance timely or on how to use their insurance. We tend to dwell on the argument, not on how to solve the problem.
Because you had claims and may have abused insurance doesn’t mean you should be penalized when you’re attempting to do the very thing we’re advocating you do — become a responsible insurance consumer.
We need to stop this mess and educate our clients. The agent or broker who swears by credit scoring is the same one who spends no time advising the client on how and when he should be using his policy, and why its important to pay his insurance (and other obligations) timely.
He/she is also the same agent not trying to look out for the interest of the client, only their own interest and greed (profit-share, etc.). Help the client to lower his premium – rich or poor — and they’ll appreciate your service, the insurance you placed them with, have an easier time paying the premium and be more apt to pay more timely. They’ll be able to afford to buy more insurance, and self insure on minor claims because you saved money them money with lower rates, and now they have money to pay for their minor dents and scrapes. The insurance company benefits, the client benefits, and the agent benefits equally.
Get rid of discriminatory practices, we don’t need credit scoring as a tool.
Insurers using Credit Score to set Rates are discrimining. There are many reasons for an individual to have a low credit score especially since there is NO STANDARD in the Credit Reporting Industry. When you go out and see what might be available to your family and allow your Credit to be reviewed – It can downgrade your score. A family can have over powering Medical Bills, so lets nail them for Auto Insurance or HomeOwneres.
To many Insurers have forgotten they are in the RISK Business and Not in the PROFIT FIRST BUSINESS. We need the industry to get back to UNDERWRITING THE RISK and stop the Discrimination.
I have always been against using credit scoring as a tool to assign premium to a risk. I, too, feel it is discriminatory and have found many clients who are clean, have beautiful homes and good automobiles but in the past found themselves in financial trouble as many if not all of us have ourselves at one time in our lives. It is absolutely wrong to have these clients pay a higher premium or exclude them from a standard company because of their credit score. As a CSR for an independent agent, it is unfair to a client and it poses much difficulty to the agency to find a fair premium for these clients. I am glad to see this lawsuit and I look forward to other companies suffering the same fate.
It is unfortunate that a social issue once agian has come to haunt the insurance industry. It is not Allstate responsiblity to make consumers to be more responsible about their credit. It is not Allstate fault more minority tend to live in urban area where physical and compreshinsive losses tend to be higher. It is not Allstate fault that on average minorities have a lower credit rating than the general population. A study has established a correlation between credit score and a propensity for certain losses. It is a fact, not a wish. This once again social policy has taken over sound business decision.
All the plaintiff attorneys have to do is contact any insurance agent within a 10 mile radius. We all have horror stories where company A and B score the same client and the scores don’t match. Agents have no access to formulas, and it really does seem like the poor pay substantially more for insurance!
I wish the plaintiffs luck and hope this is the beginning of the end of credit scoring on a national basis.
Credit scoring is certainly an accurate predictor of future claims activity and has been proven meritorious in the past. When it was first enacted, I was against it, but over time I saw that it was truly an accurate predictor. To wit, the bottom 10% of my clients as determined by credit score, had 45% of the claims experienced by my 2 million dollar book of business($2 million in annual premium from 1800 customers in NY.) It also allows companies to set rates based on expected loss due to past experience with credit scores like yours. If you have great credit and no claims, you deserve a lower rate. How that is discriminitory is beyond me. If you start a small hair products business in the ghetto and grow it to a point where you can afford a $400k house outside the ghetto, should you be required to stay in the ghetto? I think not. Conversely, if you have worked hard to keep spending in check and alway pay your bills before anything else, and don’t make trivial claims because you cannot afford to fix the car yourself, you should be rewarded with lower rates.
What I don’t understand is why there is a problem with a perfectly good plan to have persons more likely to have accidents pay their fair share of the risk. I don’t believe that there is any doubt about the acturarial tables that find a definite link between “low” credit scores and the risk of a loss.
As for claiming discrimination, the scoring does not provide the companies any information about race so what’s the problem.
As for insurance companies being in the Risk business, that may be true. But the first responsibility for any company is to turn a profit. No profit, no business. We don’t need any more Kempers out there.
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I think I’m going to file a class action because as A younger driver I have to pay more. Give me a break. The only reason minorities end up paying more is because they are notorious for having worse credit, only because when they come to this country they end up over their heads with more than they can afford-they were never taught how to manage their finances. The plaintif is hispanic, so that’s what I’m referring to. Trust me, as an Allstate agent, I know we have plenty of hispanic customers who have gotten a better rate than they would have otherwise. There are some who pay more.
And to whoever mentioned medical bills, well those don’t count against Allstate’s score. And Allstate reconsiders extreme cases such as loss of employment. So, think of something new to complain about, now that the companies are refining the process to be accurate and a good predictor of risk.
and, ALL businesses are in the business of profit, insurers just earn it by managing people’s risk for a fee. That’s obvious.
Oh, and insurance isn’t a socialist product, it isn’t ment to be less expensive for low income people, it’s ment to be less expensive for low risk people.
We’re a united country, with a Federal system of government, which means each state is a member of the union with its own law making power. Why not, then, just call states counties and take away all their law making power? that’s not how it works.
The problem with credit scoring that makes it discriminatory is that those who started out in a better over-all situation are rewarded for already being there. When you start out above the even point, its easier to stay there. When you start out in the negative, its harder to get above the even point, so you’re penalized when you attempt to employ strategies to get there.
Many people with low credit score are trying to improve them but are penalized to the point they can’t – higher rates because in the past you didn’t pay timely is not a way to educate people to pay their insurance timely or on how to use their insurance. We tend to dwell on the argument, not on how to solve the problem.
Because you had claims and may have abused insurance doesn’t mean you should be penalized when you’re attempting to do the very thing we’re advocating you do — become a responsible insurance consumer.
We need to stop this mess and educate our clients. The agent or broker who swears by credit scoring is the same one who spends no time advising the client on how and when he should be using his policy, and why its important to pay his insurance (and other obligations) timely.
He/she is also the same agent not trying to look out for the interest of the client, only their own interest and greed (profit-share, etc.). Help the client to lower his premium – rich or poor — and they’ll appreciate your service, the insurance you placed them with, have an easier time paying the premium and be more apt to pay more timely. They’ll be able to afford to buy more insurance, and self insure on minor claims because you saved money them money with lower rates, and now they have money to pay for their minor dents and scrapes. The insurance company benefits, the client benefits, and the agent benefits equally.
Get rid of discriminatory practices, we don’t need credit scoring as a tool.
Supreme Ct may get it Right –
Insurers using Credit Score to set Rates are discrimining. There are many reasons for an individual to have a low credit score especially since there is NO STANDARD in the Credit Reporting Industry. When you go out and see what might be available to your family and allow your Credit to be reviewed – It can downgrade your score. A family can have over powering Medical Bills, so lets nail them for Auto Insurance or HomeOwneres.
To many Insurers have forgotten they are in the RISK Business and Not in the PROFIT FIRST BUSINESS. We need the industry to get back to UNDERWRITING THE RISK and stop the Discrimination.
LG
I have always been against using credit scoring as a tool to assign premium to a risk. I, too, feel it is discriminatory and have found many clients who are clean, have beautiful homes and good automobiles but in the past found themselves in financial trouble as many if not all of us have ourselves at one time in our lives. It is absolutely wrong to have these clients pay a higher premium or exclude them from a standard company because of their credit score. As a CSR for an independent agent, it is unfair to a client and it poses much difficulty to the agency to find a fair premium for these clients. I am glad to see this lawsuit and I look forward to other companies suffering the same fate.
It is unfortunate that a social issue once agian has come to haunt the insurance industry. It is not Allstate responsiblity to make consumers to be more responsible about their credit. It is not Allstate fault more minority tend to live in urban area where physical and compreshinsive losses tend to be higher. It is not Allstate fault that on average minorities have a lower credit rating than the general population. A study has established a correlation between credit score and a propensity for certain losses. It is a fact, not a wish. This once again social policy has taken over sound business decision.
All the plaintiff attorneys have to do is contact any insurance agent within a 10 mile radius. We all have horror stories where company A and B score the same client and the scores don’t match. Agents have no access to formulas, and it really does seem like the poor pay substantially more for insurance!
I wish the plaintiffs luck and hope this is the beginning of the end of credit scoring on a national basis.
Credit scoring is certainly an accurate predictor of future claims activity and has been proven meritorious in the past. When it was first enacted, I was against it, but over time I saw that it was truly an accurate predictor. To wit, the bottom 10% of my clients as determined by credit score, had 45% of the claims experienced by my 2 million dollar book of business($2 million in annual premium from 1800 customers in NY.) It also allows companies to set rates based on expected loss due to past experience with credit scores like yours. If you have great credit and no claims, you deserve a lower rate. How that is discriminitory is beyond me. If you start a small hair products business in the ghetto and grow it to a point where you can afford a $400k house outside the ghetto, should you be required to stay in the ghetto? I think not. Conversely, if you have worked hard to keep spending in check and alway pay your bills before anything else, and don’t make trivial claims because you cannot afford to fix the car yourself, you should be rewarded with lower rates.
What I don’t understand is why there is a problem with a perfectly good plan to have persons more likely to have accidents pay their fair share of the risk. I don’t believe that there is any doubt about the acturarial tables that find a definite link between “low” credit scores and the risk of a loss.
As for claiming discrimination, the scoring does not provide the companies any information about race so what’s the problem.
As for insurance companies being in the Risk business, that may be true. But the first responsibility for any company is to turn a profit. No profit, no business. We don’t need any more Kempers out there.