It is just another excuse by the insurance industry to screw the consumer. An actuary would know somone who drives 12,000 miles is less likely to have an accident then a person who drives 50,000 miles per year. And that has nothing to do with your credit score.
Credit Scoring is another way or red-lining neighborhoods. Numerous studies have shown rates are significantly higher in the minority and poor neighborhoods than the risk-factor for insuring those in minority and poor neighborhoods.
Credit Scoring for insurance is wrong does not equate to a persons driving record.
The fact is that income is not included in the algorithim accept as a percentage of debt. to income factor.
The fact are that wealthy people (over 100k per year) average about 2-5 points lower on credit score than those between 30-50K family income.
The facts are that in a double blind study of over 1 million policies auto and home that credit score was the second greatest predictor of future claims..(only behind previous claims which is the single largest predictor)
The facts are that in that same double blind study race was never determined
The facts are that in the study those with the lowest 20% of scores were over twice as likely to have more than one claim and that the claim would average over 50% more in overall amount.
The facts are that by surcharging for poor scores in addition to surcharging for previous claims the industry saves those without previous claims and better bill paying practices somewhere between 20-50% in average annual premiums.
If you want to save a lot of money on insurance do these three things:
1) Don’t turn in claims for less than $2500 dollars.
2) Raise your deductible to at least $2500 or 2% of the Coverage A amount on your policy.
3) Ask for and take advantage of all available discounts that your company may make available. There are many more than most agents show you.
Final Note:
Without Credit and Claims data your company has to accept and charge for the worst case scenarios…. Their are bad apples that can only be found out by sharing this information. And all insurance customers pay for them to some extent. There are people who make a living by scamming and then sueing insurance companies… And even the employees of these companies pay the price. And this I know first hand.
People with bad credit canlive in the best neighborhoods, and people who pay their bills can live in a rowhouse in the ‘hood. What are you saying, that no one in the ‘hood pays his bills? Now THAT’s racist.
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A lot of the post here,state the “bad” apple theory to support their flawed theory of using credit scoring for insurance claims.
http://newstandardnews.net/content/index.cfm/items/2696
It is just another excuse by the insurance industry to screw the consumer. An actuary would know somone who drives 12,000 miles is less likely to have an accident then a person who drives 50,000 miles per year. And that has nothing to do with your credit score.
Credit Scoring is another way or red-lining neighborhoods. Numerous studies have shown rates are significantly higher in the minority and poor neighborhoods than the risk-factor for insuring those in minority and poor neighborhoods.
Credit Scoring for insurance is wrong does not equate to a persons driving record.
The facts from the inside.
The fact is that income is not included in the algorithim accept as a percentage of debt. to income factor.
The fact are that wealthy people (over 100k per year) average about 2-5 points lower on credit score than those between 30-50K family income.
The facts are that in a double blind study of over 1 million policies auto and home that credit score was the second greatest predictor of future claims..(only behind previous claims which is the single largest predictor)
The facts are that in that same double blind study race was never determined
The facts are that in the study those with the lowest 20% of scores were over twice as likely to have more than one claim and that the claim would average over 50% more in overall amount.
The facts are that by surcharging for poor scores in addition to surcharging for previous claims the industry saves those without previous claims and better bill paying practices somewhere between 20-50% in average annual premiums.
If you want to save a lot of money on insurance do these three things:
1) Don’t turn in claims for less than $2500 dollars.
2) Raise your deductible to at least $2500 or 2% of the Coverage A amount on your policy.
3) Ask for and take advantage of all available discounts that your company may make available. There are many more than most agents show you.
Final Note:
Without Credit and Claims data your company has to accept and charge for the worst case scenarios…. Their are bad apples that can only be found out by sharing this information. And all insurance customers pay for them to some extent. There are people who make a living by scamming and then sueing insurance companies… And even the employees of these companies pay the price. And this I know first hand.
People with bad credit canlive in the best neighborhoods, and people who pay their bills can live in a rowhouse in the ‘hood. What are you saying, that no one in the ‘hood pays his bills? Now THAT’s racist.