And, of course, low-income people do NOT have credit scores that are \”just as good\” as rich people, even if they\’ve managed their money well, because you have to have a significant credit history in order to build solid credit scores, and the percentage of available credit in use is a significant factor in credit scoring.
Please note the venue of this case, \”U.S. Supreme Court\”. Do we really want federal vs state regulation of the industry? I think we may be in a slippery slope and we may not be able to wiggle out.
The dumbing down of underwriting by the use of credit scores has paved the way for \”pay-at-the-pump\” auto insurance. No agents and an assignment of risk by percent of state book for $.714 per gallon based on 700 gallons per year.
Get ready isnurance guru\’s you have created your own demise… one policy for all and one price for all with no arguement about underwriting criteria because agents think a credit score is a better indicator than age, sex, experience, location, etc.
Geez there are a lot of dumb sheep in the world. Still think credit scores rock?
Ain\’t it amazing! This was an article about the legal question of sending out legal notices, and it has disolved into an argument about the merits of credit scoring. That wasn\’t the original topic, but that always happens when this subject comes up.
It seems you have the pro and con factions that, like politics, aren\’t going to change their opinions. You have one side that believes in the free enterprise system, and allow business to have a free market, and then you have the warm and fuzzy philophy of keeping the poor downtrodden consumer from being victimized.Big government types vs. private enterprise. Pick a side.
I have watched with amusement on the issues of credit scoring. I have been an agent/broker in Calif for over 26 yrs. My belief in this whole mess you folks deal with is that credit or no credit, the agency knows its client better than any numbers can factor as predictors of loss. Calif no longer has credit scoring of any type with regards to personal lines. I have seen all of those issues that have been posted and have listened to the carriers use their song and dance schpiel about credit. The carriers doing business in Calif are making lots of money, rates have come down and are continuing to come down. I also serve on a Nat\’l Agency Council where there are these god awful things called 48 tiered pricing models elsewhere. We don\’t have to deal with that here and with the continuing profitability of the carriers, they treat Calif a whole lot differently….more like a hands off approach. We have 2 rating bands….good driver and non good driver as it regards auto. 1 rating band as it results with any other line of business. Many carriers use a \”merit rating\” tool to surcharge property policies with claims issues. My belief in the system stems that the agency knows its clients and where to place them where they should be placed. For my agency group, it has worked very well come contingency time and with commissions being at or near 15% on all lines. These statistics may well work in theory, but real world numbers over a period of several years now, are proof in the pudding.
I recently moved from Ca to Colorado. I was amazed at how much my premiums went up due to credit scoring. We bought a new house, shopped mortgages, and whamoo my home and auto insurance is way more here.
Ca\’s system works, plain and simple.
I don\’t sell personal lines, but work in an office that does. They really hammer you in Co if your credit is bad or credit score low. How is a person making 20-25K per year suppose to have a high credit rating??
My opinion is rate based upon claims,driving record, zip code and number of miles driven per year.
You know what I like? The fact that everybody is so busy taking stands that no one will answer my question. Not being a numbers guy, I couldn\’t hack my way through the study, so I\’m sadly ignorant.
Let me take a stab at answering my question using the positions staked out by other posters.
Position 1: There is a published, peer-reviewed study that shows a statistically defensible correlation between good credit scores and low claims.
Position 2: Credit scores are being misused by companies in order to promote racist and \”class\” (whatever the hell that is) agendas.
Position 3: Any sort of rating scheme that relies on individual characteristics is bad, and everyone should pay the same amount regardless of past history, current status, or predicted behavior.
Did I miss something?
Would somebody answer my question, or are we going to continue chest-beating and castle building?
Anyone who believes credit scoring is a great underwriting tool has never been in an agency. You see we insure people not statistics, with proper field underwriting my agency has been profitable 30 out of 32 years. Insurance companies want there employees to buy into blind and statistical underwriting, and you have! Why because you are easier to manipulate. Credit scoring in California for example is illegal, and our rates over the past 10 years have improved. We also write in Nevada, Oregon, Washington, and Arizona, all of which use credit scoring. All have lower repair costs, less dense population, and fewer attorneys. So why are my rates in Northern California lower than all those states. CALIFORNIA DOES NOT USE CREDIT SCORING, THATS WHY. All of you company people that buy into your companies virtue wake up! You only know what the industry tells you, and they tell you that agency owners are complainers. We complain because your bosses and CEO\’s are afraid of the truth. Please the only thing that credit scoring is marginally accurate at determining is the insured\’s ability to pay, and that is biased.
Credit scoring is a tool that works in the right hands. Need we not forget the law of large numbers. This tool works for the masses and may not be a perfect fit for every individual case, but it does work. This is not something that is going away either, so use it to your advantage. Learn the system and play the game, because just about anyone can raise their insurance score and lower their rates. A site that I, as an agent, find helpful is insurancescore.net. This may be a shameful plug, but they have helped several of my clients lower their premiums. Just keep in mind this is not a regular \”credit score\” that the industry is using, it is calculated differently and is referred to as an \”insurance score.\”
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And, of course, low-income people do NOT have credit scores that are \”just as good\” as rich people, even if they\’ve managed their money well, because you have to have a significant credit history in order to build solid credit scores, and the percentage of available credit in use is a significant factor in credit scoring.
Please note the venue of this case, \”U.S. Supreme Court\”. Do we really want federal vs state regulation of the industry? I think we may be in a slippery slope and we may not be able to wiggle out.
The dumbing down of underwriting by the use of credit scores has paved the way for \”pay-at-the-pump\” auto insurance. No agents and an assignment of risk by percent of state book for $.714 per gallon based on 700 gallons per year.
Get ready isnurance guru\’s you have created your own demise… one policy for all and one price for all with no arguement about underwriting criteria because agents think a credit score is a better indicator than age, sex, experience, location, etc.
Geez there are a lot of dumb sheep in the world. Still think credit scores rock?
Ain\’t it amazing! This was an article about the legal question of sending out legal notices, and it has disolved into an argument about the merits of credit scoring. That wasn\’t the original topic, but that always happens when this subject comes up.
It seems you have the pro and con factions that, like politics, aren\’t going to change their opinions. You have one side that believes in the free enterprise system, and allow business to have a free market, and then you have the warm and fuzzy philophy of keeping the poor downtrodden consumer from being victimized.Big government types vs. private enterprise. Pick a side.
I have watched with amusement on the issues of credit scoring. I have been an agent/broker in Calif for over 26 yrs. My belief in this whole mess you folks deal with is that credit or no credit, the agency knows its client better than any numbers can factor as predictors of loss. Calif no longer has credit scoring of any type with regards to personal lines. I have seen all of those issues that have been posted and have listened to the carriers use their song and dance schpiel about credit. The carriers doing business in Calif are making lots of money, rates have come down and are continuing to come down. I also serve on a Nat\’l Agency Council where there are these god awful things called 48 tiered pricing models elsewhere. We don\’t have to deal with that here and with the continuing profitability of the carriers, they treat Calif a whole lot differently….more like a hands off approach. We have 2 rating bands….good driver and non good driver as it regards auto. 1 rating band as it results with any other line of business. Many carriers use a \”merit rating\” tool to surcharge property policies with claims issues. My belief in the system stems that the agency knows its clients and where to place them where they should be placed. For my agency group, it has worked very well come contingency time and with commissions being at or near 15% on all lines. These statistics may well work in theory, but real world numbers over a period of several years now, are proof in the pudding.
I recently moved from Ca to Colorado. I was amazed at how much my premiums went up due to credit scoring. We bought a new house, shopped mortgages, and whamoo my home and auto insurance is way more here.
Ca\’s system works, plain and simple.
I don\’t sell personal lines, but work in an office that does. They really hammer you in Co if your credit is bad or credit score low. How is a person making 20-25K per year suppose to have a high credit rating??
My opinion is rate based upon claims,driving record, zip code and number of miles driven per year.
You know what I like? The fact that everybody is so busy taking stands that no one will answer my question. Not being a numbers guy, I couldn\’t hack my way through the study, so I\’m sadly ignorant.
Let me take a stab at answering my question using the positions staked out by other posters.
Position 1: There is a published, peer-reviewed study that shows a statistically defensible correlation between good credit scores and low claims.
Position 2: Credit scores are being misused by companies in order to promote racist and \”class\” (whatever the hell that is) agendas.
Position 3: Any sort of rating scheme that relies on individual characteristics is bad, and everyone should pay the same amount regardless of past history, current status, or predicted behavior.
Did I miss something?
Would somebody answer my question, or are we going to continue chest-beating and castle building?
Anyone who believes credit scoring is a great underwriting tool has never been in an agency. You see we insure people not statistics, with proper field underwriting my agency has been profitable 30 out of 32 years. Insurance companies want there employees to buy into blind and statistical underwriting, and you have! Why because you are easier to manipulate. Credit scoring in California for example is illegal, and our rates over the past 10 years have improved. We also write in Nevada, Oregon, Washington, and Arizona, all of which use credit scoring. All have lower repair costs, less dense population, and fewer attorneys. So why are my rates in Northern California lower than all those states. CALIFORNIA DOES NOT USE CREDIT SCORING, THATS WHY. All of you company people that buy into your companies virtue wake up! You only know what the industry tells you, and they tell you that agency owners are complainers. We complain because your bosses and CEO\’s are afraid of the truth. Please the only thing that credit scoring is marginally accurate at determining is the insured\’s ability to pay, and that is biased.
Credit scoring is a tool that works in the right hands. Need we not forget the law of large numbers. This tool works for the masses and may not be a perfect fit for every individual case, but it does work. This is not something that is going away either, so use it to your advantage. Learn the system and play the game, because just about anyone can raise their insurance score and lower their rates. A site that I, as an agent, find helpful is insurancescore.net. This may be a shameful plug, but they have helped several of my clients lower their premiums. Just keep in mind this is not a regular \”credit score\” that the industry is using, it is calculated differently and is referred to as an \”insurance score.\”
Dont go to that website – ITs a scam. That last post was an advertisment for a fishing scam. Thats really low.