That\’s specious nonsense. I transported the elderly for years and the absolute worst drivers on the road were driving rather large and EXPENSIVE trucks.
Furtheremore, that issue just came up here in Oregon, and when I asked the insurance industry for the data, there was none.
I\’ve had cancer with no medical insurance. Please, do explain to me how suddenly that made my perfect driving record imperfect. Please, do explain how cancer made me a greater risk. I would love to hear, so talk.
When I was driving, the most road rage, the most reckless, and the most inconsiderate drivers were middle aged white men in large pick ups. Dodge Rams, Ford F250\’s and up, and oddly, in order to own one of these, one must have excellent credit. My son-in-law sells cars and he assures me that they are not giving them away, so excellent credit is a must.
Credit scoring is a parasitical practice designed to keep the lowest income bracket low.
Credit scoring is one more effective weapon in the class war that this country is engaged in.
Credit scoring is another way to keep a low wage labor pool.
Remember Enron? Bet they all had good credit. How about MCI Worldcom? Bet they had great credit, and let\’s not forget the Tyco debacle. Good credit there, too.
So how about someone tells the victims of these corporations that since they were wiped out by these thieves, that now their insurance rates must rise. Why? Because they\’re credit is now bad.
And also, let\’s not forget the insurance industry was next to no help in the aftermath of Hurricane Katrina.
In general, if someone has poor credit/financial problems they are more likely to file a claim even if it is just above the deductible because they are having financial issues. Not to mention property mysteriously disappearing in order to score quick cash and get out of a financial jam. It is controversial, but dealing with large number it works. It comes down to how responsible you manage money and pay your bills.
It is more likely that a person with bad credit will cost the insurer money. It\’s actuarial statistical fact.
Similary, having a lot of speeding tickets is also a predictive tool. Not all people who get tickets will cost the insurance company claims payouts, but it\’s an excellent predictor. If you show me an example of a driver with a lot of tickets with no accidents, does that invalidate the predictive power of traffic tickets? No!
Smoking is the biggest predictor in life insurance, yet I personally know of a lifetime smoker who lived to be in his 90s. Does this invalidate smoking as a predictive tool?? NO!
The point: Individual examples are not enough to denounce a predictive process. You have to understand, literally millions and millions of drivers are used in these credit studies. The statistical correlations are extremely high.
C. Williams, that was a great post – primarily because it reminded me that underwriters DO have the flexibility to use their judgment as I did recently with a sucky credit report due to the Katrina aftermath – an isolated incident, I\’m sure, and I\’m talking about a specialized line of business, but understanding the circumstances goes a long way toward allowances. Thanks for your post.
I know people who would be considered low-income, who have good credit score ratings because they pay their bills on time and don\’t over-extend themselves for things they can live without. I also know middle and upper income people who spend more than they make and score badly.
Seems to me insurance crdit scoring is more about living responsibly and not making bad decisions, which would also seem indicative of being a good or poor insurance risk.
I love it. Since it\’s inception my auto insurance premiums have gone down considerably, and as an insurance agent most of my customers have benefited greatly from it\’s use.
The whiners and \”share the wealth\” folks like C. Williams don\’t like it, but for the vast majority of reponsible people it is in their best interest. Is a \”good predictor\” of claims? I frankly doubt it. But it makes the deadbeats pay more, and reasponsible people pay less, which is jsut the way life is.
What if I told you I had a huge study that said black people had more claims, so therefore all the big companies are now going to use race based rating? Now, what about religion?
We have already decided that we do not want to descriminate based on race or religion, so companies cant do this. ITs politically incorrect to even conduct the study.
That brings us to discriminating against the poor. As a country we are in the process of deciding if we think this is ok.
But the truth is, I bet if you showed people that blacks had more claims, most white people would say its ok to discriminate against blacks and charge them higher rates. As a country we really havnt come that far.
One more thing, you may be saying, the companies want to charge higher rates to folks who are irresponcible with money and ahve bad scores, not poor people.
OK, but I have to ask, what is the average ins score of someone with an income of 15,000 to 20,000k? What is the average ins score of someone who has a score of someone who makes 20 to 30k? How bout 50 to 60k?
When will my marketing rep deliver that information? Never? Do you folks have it? Please post it!
I believe logically that it is easier to pay your bills and thus establish a responcible credit history if you have a higher income.
If you make 15 to 20k and are part of the working poor, lets see you pay those bills and avoid running up a little credit card debt when your junk car goes dead on the way to work. Want to splurge on some new cloths for little Jimmy this Xmas?
Statistically speaking I believe someone making less will more often have a poorer score.
Its posible to have a good score making under 20,000, I did it for years (recently), but I was lucky, and its not easy. I find it much easier to maintain my excellent ins score now that I make more money.
Oh, gimme a break! It\’s an insult to those people with lower incomes to immediately equate them with low credit scores. I have been in this business for many years, and have never been able to determine that people with low incomes have low credit scores. I have seen a lot of people with good incomes have low scores; it is not a function of income. It reveals responsible management of your affairs.
Yea great post by Danny P. We live in a materialistic society where no one wants to be the odd man out who is poor.
Everyone wants new shoes and cabel TV and the new video game. Folks making 19,000 will have those things. They will also have credit card debt and a worse credit score.
The person making 30,000 will have all of those things too, but they will have less debt and a better score, its just a fact of life in our consumer society.
Also I agree, can anyone find what the average insuracne score is for someone making 20,000? Id LOVE TO KNOW. IT SOUNDS LIKE AN IMPORTANT PART OF THE ARGUMENT
Then prove it bob, show me the DATA. If it were out there wouldnt your marketing rep have brought it to you already? If you can show that credit score and income are not related show it to me.
I will shut up, and print it out and show it to my next client that complains. I hope im wrong, cause I think credit scoring is here to stay and I dont want to be the bad guy.
One more thing, Ive been doing this for many years too, but only running credit scores for 5 years, and many of my \”poorer\” folks with older cars and Mcjobs have crap scores! Sorry thats just my reality.
Show me a guy with a nice car, good job, and a family, and many times the score gets better, not always, but ALMOST ALWAYS.
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That\’s specious nonsense. I transported the elderly for years and the absolute worst drivers on the road were driving rather large and EXPENSIVE trucks.
Furtheremore, that issue just came up here in Oregon, and when I asked the insurance industry for the data, there was none.
I\’ve had cancer with no medical insurance. Please, do explain to me how suddenly that made my perfect driving record imperfect. Please, do explain how cancer made me a greater risk. I would love to hear, so talk.
When I was driving, the most road rage, the most reckless, and the most inconsiderate drivers were middle aged white men in large pick ups. Dodge Rams, Ford F250\’s and up, and oddly, in order to own one of these, one must have excellent credit. My son-in-law sells cars and he assures me that they are not giving them away, so excellent credit is a must.
Credit scoring is a parasitical practice designed to keep the lowest income bracket low.
Credit scoring is one more effective weapon in the class war that this country is engaged in.
Credit scoring is another way to keep a low wage labor pool.
Remember Enron? Bet they all had good credit. How about MCI Worldcom? Bet they had great credit, and let\’s not forget the Tyco debacle. Good credit there, too.
So how about someone tells the victims of these corporations that since they were wiped out by these thieves, that now their insurance rates must rise. Why? Because they\’re credit is now bad.
And also, let\’s not forget the insurance industry was next to no help in the aftermath of Hurricane Katrina.
In general, if someone has poor credit/financial problems they are more likely to file a claim even if it is just above the deductible because they are having financial issues. Not to mention property mysteriously disappearing in order to score quick cash and get out of a financial jam. It is controversial, but dealing with large number it works. It comes down to how responsible you manage money and pay your bills.
One more time, let me repeat,
credit scoring is a predictive tool.
It is more likely that a person with bad credit will cost the insurer money. It\’s actuarial statistical fact.
Similary, having a lot of speeding tickets is also a predictive tool. Not all people who get tickets will cost the insurance company claims payouts, but it\’s an excellent predictor. If you show me an example of a driver with a lot of tickets with no accidents, does that invalidate the predictive power of traffic tickets? No!
Smoking is the biggest predictor in life insurance, yet I personally know of a lifetime smoker who lived to be in his 90s. Does this invalidate smoking as a predictive tool?? NO!
The point: Individual examples are not enough to denounce a predictive process. You have to understand, literally millions and millions of drivers are used in these credit studies. The statistical correlations are extremely high.
C. Williams, that was a great post – primarily because it reminded me that underwriters DO have the flexibility to use their judgment as I did recently with a sucky credit report due to the Katrina aftermath – an isolated incident, I\’m sure, and I\’m talking about a specialized line of business, but understanding the circumstances goes a long way toward allowances. Thanks for your post.
I know people who would be considered low-income, who have good credit score ratings because they pay their bills on time and don\’t over-extend themselves for things they can live without. I also know middle and upper income people who spend more than they make and score badly.
Seems to me insurance crdit scoring is more about living responsibly and not making bad decisions, which would also seem indicative of being a good or poor insurance risk.
I love it. Since it\’s inception my auto insurance premiums have gone down considerably, and as an insurance agent most of my customers have benefited greatly from it\’s use.
The whiners and \”share the wealth\” folks like C. Williams don\’t like it, but for the vast majority of reponsible people it is in their best interest. Is a \”good predictor\” of claims? I frankly doubt it. But it makes the deadbeats pay more, and reasponsible people pay less, which is jsut the way life is.
What if I told you I had a huge study that said black people had more claims, so therefore all the big companies are now going to use race based rating? Now, what about religion?
We have already decided that we do not want to descriminate based on race or religion, so companies cant do this. ITs politically incorrect to even conduct the study.
That brings us to discriminating against the poor. As a country we are in the process of deciding if we think this is ok.
But the truth is, I bet if you showed people that blacks had more claims, most white people would say its ok to discriminate against blacks and charge them higher rates. As a country we really havnt come that far.
One more thing, you may be saying, the companies want to charge higher rates to folks who are irresponcible with money and ahve bad scores, not poor people.
OK, but I have to ask, what is the average ins score of someone with an income of 15,000 to 20,000k? What is the average ins score of someone who has a score of someone who makes 20 to 30k? How bout 50 to 60k?
When will my marketing rep deliver that information? Never? Do you folks have it? Please post it!
I believe logically that it is easier to pay your bills and thus establish a responcible credit history if you have a higher income.
If you make 15 to 20k and are part of the working poor, lets see you pay those bills and avoid running up a little credit card debt when your junk car goes dead on the way to work. Want to splurge on some new cloths for little Jimmy this Xmas?
Statistically speaking I believe someone making less will more often have a poorer score.
Its posible to have a good score making under 20,000, I did it for years (recently), but I was lucky, and its not easy. I find it much easier to maintain my excellent ins score now that I make more money.
But doesnt that just make common sense??
Oh, gimme a break! It\’s an insult to those people with lower incomes to immediately equate them with low credit scores. I have been in this business for many years, and have never been able to determine that people with low incomes have low credit scores. I have seen a lot of people with good incomes have low scores; it is not a function of income. It reveals responsible management of your affairs.
Yea great post by Danny P. We live in a materialistic society where no one wants to be the odd man out who is poor.
Everyone wants new shoes and cabel TV and the new video game. Folks making 19,000 will have those things. They will also have credit card debt and a worse credit score.
The person making 30,000 will have all of those things too, but they will have less debt and a better score, its just a fact of life in our consumer society.
Also I agree, can anyone find what the average insuracne score is for someone making 20,000? Id LOVE TO KNOW. IT SOUNDS LIKE AN IMPORTANT PART OF THE ARGUMENT
Then prove it bob, show me the DATA. If it were out there wouldnt your marketing rep have brought it to you already? If you can show that credit score and income are not related show it to me.
I will shut up, and print it out and show it to my next client that complains. I hope im wrong, cause I think credit scoring is here to stay and I dont want to be the bad guy.
One more thing, Ive been doing this for many years too, but only running credit scores for 5 years, and many of my \”poorer\” folks with older cars and Mcjobs have crap scores! Sorry thats just my reality.
Show me a guy with a nice car, good job, and a family, and many times the score gets better, not always, but ALMOST ALWAYS.