Wow after 30 years as a broker this is the best snowjob that any industry has sold to the consumers, KUDOS! We are making the oil and tobacco industry yearn for another burn. Let me give THREE REASONS that this was a great snowjob 1) The insurance industry heavily funded against it. They are high-fiving and laughing at there power. Why would they want lower premiums, because if you believe this, then you must believe the oil companies are going to return their profits for high prices at the pump. 2) It has always been a fact that our best policyholders had the ability to pay, but if the insurance companies said this it would be unfair, so they have you believe that credit scoring is not the same. The ability to pay is what determines you credit score! 3) Finally, this is how the tobacco industry made billions, they did not tell the consumer what was in their cigarettes, and when asked said I don\’t know. Please someone tell me how the credit score formula is derived, it you ask any lending institution they will say \”I really don\’t know\” yet they base your rate or even acceptance on this. Believe me they will not tell you whats in the formula because it only favors who CORPORATE AMERICA. Please if you really believe this was good for the consumers, then your corporate bosses have done a great job of selling. Simply put, this was a business decision made by the insurance industry to boost profits by giving better rates to those with the ability to pay. Do you really believe that poor people can not manage there finances, they simple do not make enough money to manage. So from an underwriting viewpoint not making enough money creates ONE KIND of stress that causes accident, so does divorce,death, and illness. So now lets increase rates if you have step children. I think I\’ve made my point, there are many factors which can effect the probablity of a loss, but credit scoring is category of consumers rated by their pocketbook, not their driving record.
Definition of: by Merriam-Webster
Main Entry: 2red·line
Pronunciation: \’red-\”līn, -\’līn
intransitive senses
: to withhold home-loan funds or insurance from neighborhoods considered poor economic risks
transitive senses : to discriminate against in housing or insurance.
Being poor or working class is not a crime! Nor does it mean one is a worst insurance risk than others. This defeat is nothing more than an endorsement of legalized redlining. It also shows those with better \”means\” have a higher likelihood of voting than those who are struggling and most likely to worry about getting to work on election day. What happens if you have no health insurance and you have a heart attack? The hospital puts you into collection and you are therefore a \”bad driver?\” Give me a break!
Congrats Oregonians for realizing that your majority can and will rule when it comes to smart business decisions. I can imagine the uproar this would have caused country wide if Measure 42 would have passed. I\’ll bet the 34.42% who voted for this measure all have adverse financial responsibility habits. Again congrats to you for setting the bar level for the rest of the country.
It is not a great stretch of the imagination to accept the possibility that there are people with poor credit scores who are no more of a risk to an insurer as someone with a perfect credit score.
Where has it been proven that low income or one\’s income to debt ratio has any bearing on their driving habits or exposure to risk? What resources might I tap to obtain this information?
Granted, some low-income people can\’t afford insurance and therefore go without it, often illegally. But there are well-to-do people who break the law, too… and drink and drive and have dangerous habits. There are certain people in all levels of income who are high risks and I\’m betting the risk has little (if anything) to do with their credit score.
Yesterday I saw who was voting, upper middle class who know what their credit score is, the 18-20 year old age group was missing… they are the market that should be educated as to what they\’re credit scores truly mean…
I suspect that KLS needs a bit more info concerning credit scoring. Most models do not in clude income in its formula. How timely your bills are paid is weighted more heavily. Rich or poor, it doesn\’t matter, only if you pay your bills.
Yes, I *DO* need more information. I plainly asked for it.
Timely payment of bills is part of the equation, that much I know. However, I\’m fairly certain income and income-to-debt ratio is factored into a credit score.
Again, I don\’t see how the inability to balance a budget is parallel with an insurance risk. Credit scoring has it\’s benefits, but I\’m not sure how those benefits apply to common types of insurance.
Do credit scores specify whether slow/late payment is due to unforeseen circumstances or irresponsibility? It\’s unethical to assume that ALL bad credit scores are due to ignorance or carelessness with money.
If someone is a horrible money manager, does that automatically mean they\’re a bad driver? Prone to illness? Likely to make/cause unnecessary claims?
If someone has an excellent credit score, what can one assume about that person? Can we assume they\’re \’Safety Jones\’ behind the wheel? Can we assume with certainty that they keep the trees around their house trimmed and their sidewalks free of ice in the winter?
KLS your starting to catch on. People with poor or adverse credit scores (not credit reports) tend to have more claims as a whole. Not all people in a certain group have the same habits of that group but this is still \”the group\”.
People with good or better credit scores tend to make premium payments on time, have less tendency to file claims, and tend to stay with the same insurer longer thus reducing overall expenses to the carriers.
The industry has done many studies on this issue therefore the actuarials tend to favor the better credit scoring individuals.
I\’m all for it. You can give me 5 good credit scoring clients and you can have the 10 others.
I\’ve seen studies on the increase in rating accuracy by incorporating credit scoring to personal auto rating and the results are remarkably strong. Risks with the best credit score are often twice as profitable as those with the lowest score.
Nobody is saying that credit scores are perfect predictors of loss. They aren\’t, but no other rating variable is. Just like there are drivers out there with speeding tickets who won\’t cause wrecks there are drivers with poor credit scores that won\’t cause wrecks either, but the Insurance company is just playing the odds.
If incorporating these models didn\’t improve price segmentation, then insurers wouldn\’t use them. Heck, if you really think that credit score isn\’t predictive of loss activity then start your own company, don\’t surcharge for poor credit score, and write all the poor credit risks. I\’m sure you\’ll make a fortune….
Do you believe that people with high credit scores should pay less for there insurance? If so, please answer this. If 2 out of 10 people with low credit scores have accidents, and people with a high credit score have only 1 out of 10 accidents, under what logic can you explain to those 8 people without an accident that they deserve to pay more for there insurance. Please explain…..
We have updated our privacy policy to be more clear and meet the new requirements of the GDPR. By continuing to use our site, you accept our revised Privacy Policy.
Wow after 30 years as a broker this is the best snowjob that any industry has sold to the consumers, KUDOS! We are making the oil and tobacco industry yearn for another burn. Let me give THREE REASONS that this was a great snowjob 1) The insurance industry heavily funded against it. They are high-fiving and laughing at there power. Why would they want lower premiums, because if you believe this, then you must believe the oil companies are going to return their profits for high prices at the pump. 2) It has always been a fact that our best policyholders had the ability to pay, but if the insurance companies said this it would be unfair, so they have you believe that credit scoring is not the same. The ability to pay is what determines you credit score! 3) Finally, this is how the tobacco industry made billions, they did not tell the consumer what was in their cigarettes, and when asked said I don\’t know. Please someone tell me how the credit score formula is derived, it you ask any lending institution they will say \”I really don\’t know\” yet they base your rate or even acceptance on this. Believe me they will not tell you whats in the formula because it only favors who CORPORATE AMERICA. Please if you really believe this was good for the consumers, then your corporate bosses have done a great job of selling. Simply put, this was a business decision made by the insurance industry to boost profits by giving better rates to those with the ability to pay. Do you really believe that poor people can not manage there finances, they simple do not make enough money to manage. So from an underwriting viewpoint not making enough money creates ONE KIND of stress that causes accident, so does divorce,death, and illness. So now lets increase rates if you have step children. I think I\’ve made my point, there are many factors which can effect the probablity of a loss, but credit scoring is category of consumers rated by their pocketbook, not their driving record.
Definition of: by Merriam-Webster
Main Entry: 2red·line
Pronunciation: \’red-\”līn, -\’līn
intransitive senses
: to withhold home-loan funds or insurance from neighborhoods considered poor economic risks
transitive senses : to discriminate against in housing or insurance.
Being poor or working class is not a crime! Nor does it mean one is a worst insurance risk than others. This defeat is nothing more than an endorsement of legalized redlining. It also shows those with better \”means\” have a higher likelihood of voting than those who are struggling and most likely to worry about getting to work on election day. What happens if you have no health insurance and you have a heart attack? The hospital puts you into collection and you are therefore a \”bad driver?\” Give me a break!
Congrats Oregonians for realizing that your majority can and will rule when it comes to smart business decisions. I can imagine the uproar this would have caused country wide if Measure 42 would have passed. I\’ll bet the 34.42% who voted for this measure all have adverse financial responsibility habits. Again congrats to you for setting the bar level for the rest of the country.
In my opinion, it sounds like rubbish.
It is not a great stretch of the imagination to accept the possibility that there are people with poor credit scores who are no more of a risk to an insurer as someone with a perfect credit score.
Where has it been proven that low income or one\’s income to debt ratio has any bearing on their driving habits or exposure to risk? What resources might I tap to obtain this information?
Granted, some low-income people can\’t afford insurance and therefore go without it, often illegally. But there are well-to-do people who break the law, too… and drink and drive and have dangerous habits. There are certain people in all levels of income who are high risks and I\’m betting the risk has little (if anything) to do with their credit score.
Yesterday I saw who was voting, upper middle class who know what their credit score is, the 18-20 year old age group was missing… they are the market that should be educated as to what they\’re credit scores truly mean…
I suspect that KLS needs a bit more info concerning credit scoring. Most models do not in clude income in its formula. How timely your bills are paid is weighted more heavily. Rich or poor, it doesn\’t matter, only if you pay your bills.
You suspect correctly, RJW.
Yes, I *DO* need more information. I plainly asked for it.
Timely payment of bills is part of the equation, that much I know. However, I\’m fairly certain income and income-to-debt ratio is factored into a credit score.
Again, I don\’t see how the inability to balance a budget is parallel with an insurance risk. Credit scoring has it\’s benefits, but I\’m not sure how those benefits apply to common types of insurance.
Do credit scores specify whether slow/late payment is due to unforeseen circumstances or irresponsibility? It\’s unethical to assume that ALL bad credit scores are due to ignorance or carelessness with money.
If someone is a horrible money manager, does that automatically mean they\’re a bad driver? Prone to illness? Likely to make/cause unnecessary claims?
If someone has an excellent credit score, what can one assume about that person? Can we assume they\’re \’Safety Jones\’ behind the wheel? Can we assume with certainty that they keep the trees around their house trimmed and their sidewalks free of ice in the winter?
KLS your starting to catch on. People with poor or adverse credit scores (not credit reports) tend to have more claims as a whole. Not all people in a certain group have the same habits of that group but this is still \”the group\”.
People with good or better credit scores tend to make premium payments on time, have less tendency to file claims, and tend to stay with the same insurer longer thus reducing overall expenses to the carriers.
The industry has done many studies on this issue therefore the actuarials tend to favor the better credit scoring individuals.
I\’m all for it. You can give me 5 good credit scoring clients and you can have the 10 others.
I\’ve seen studies on the increase in rating accuracy by incorporating credit scoring to personal auto rating and the results are remarkably strong. Risks with the best credit score are often twice as profitable as those with the lowest score.
Nobody is saying that credit scores are perfect predictors of loss. They aren\’t, but no other rating variable is. Just like there are drivers out there with speeding tickets who won\’t cause wrecks there are drivers with poor credit scores that won\’t cause wrecks either, but the Insurance company is just playing the odds.
If incorporating these models didn\’t improve price segmentation, then insurers wouldn\’t use them. Heck, if you really think that credit score isn\’t predictive of loss activity then start your own company, don\’t surcharge for poor credit score, and write all the poor credit risks. I\’m sure you\’ll make a fortune….
Do you believe that people with high credit scores should pay less for there insurance? If so, please answer this. If 2 out of 10 people with low credit scores have accidents, and people with a high credit score have only 1 out of 10 accidents, under what logic can you explain to those 8 people without an accident that they deserve to pay more for there insurance. Please explain…..