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Insurance Scoring (Credit Checks)

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  • Insurance Scoring (Credit Checks)

    Actually I work in the Insurance industry for one of the biggest companies. The reason for Insurance Scoring (i.e. credit scoring) is because it can be proven that statistically people with financial problems are more LIKELY to file erroneous or exaggerated claims. I personally hate Insurance Scoring as I have never had one claim in my entire life so I have a perfect CLUE Report (a report that shows all paid/submitted claims). I have also never been involved in an accident. I mean I can see a company using the Insurance Score originally at New Business, but I honestly think once you have been with them for 3+ years they should NOT care about your credit if you have not filed a claim.... if you were going to be dishonest you would not wait 3+ years.

    Very few States make it where insurance carriers cannot use credit for insurance premium determination. California is one of them. So if you are in California (at least for Auto) you will not need to worry. The only thing the Insurance Commissioner will allow a company to use your credit score for in California (Auto) is if you want to make your payments in monthly installments. If you refuse to allow use of credit scoring or you have bad credit, they make you pay your premium in full at inception. This weeds out a lot of people with bad credit as they do not normally have the funds to make a large payment for insurance. I live in Indiana so my rates are personally not bad as the company I go through (not my employer) grandfathered me in when I left one of their competitors with their highest tier (best rates) and do not use my credit - though normally they do credit checks on renewals. I pay $900.00 a year for two newer vehicles with full coverage and 1/2 million dollar liability. That is really good. I am glad I do not live in California anymore! Their rates are high, like many other states (Florida, New York, New Jersey, Michigan).
    Chapter 13 Filed November 10, 2010 Indiana - Southern District - United States Seventh Circuit
    Attended 341 hearing 12/15/2010

  • #2
    @above,

    You have explained this very nicely, I did not know that there is some thing called insurance score which includes credit score as well as insurance holder's performance with a insurance policy, whether they were involved in fraudulent claims or not.
    URL Removed by Admin

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    • #3
      Originally posted by greg2169 View Post
      if you have geico your insurance will not go up... i got a DWI and they never found out about it and has been 3 years, they do not check your credit to renew so as long as you stay with them you will be fine.... i did check other companies with my bad credit now and the rates are 2-3 times as much as i am currently paying
      It's not Geico or any insurance carrier - it's the state in which you reside. If your state allows insurance credit profiling and you have bad credit or file BK, expect your rates to increase. If your state does not allow the practice, your rates won't increase due to your credit or BK but they can for other reasons (accident, tickets, etc.). If your rates rise and your state does not allow insurance credit profiling and you suspect the increase is due to the BK or bad credit, check with your insurance carrier about the increase and if you are not satisfied with the answer contact your state Department of Insurance and complain. The key is whether or not your state allows insurance credit profiling. Many do not.
      _________________________________________
      Filed 5 Year Chapter 13: April 2002
      Early Buy-Out: April 2006
      Discharge: August 2006

      "A credit card is a snake in your pocket"

      Comment


      • #4
        fishersmike, what's the form called that describes your coverage under each category? Several years ago I did an apples to apples comparison using that form (I think it was called a B1 or something) that described the exact coverage I had with my current insurer. I faxed that form (which was provided by my insurance carrier) to other insurers asking for a quote based on that coverage. Without it, I found that insurance companies would quote me different rates, some of which sounded really good until they did the comparison with the form I had. I wish I could remember it because it was very helpful to me.

        Comment


        • #5
          The insurance companies checking credit is so wrong. People are filing bankruptcy or not able to pay their bills which destroys their credit is for different reasons from 10 years ago. A lot of jobs have been lost. If you lose your job and are on unemployment, it makes it difficult to pay for everything that you were prior to losing your job. This insurance scoring seems so unfair. Things have changed in our economy and it has absolutely nothing to do with me or my husband being fraudulent or being a risky driver.

          I think it is absolute bull crap that they charge us more money for car insurance that we are required to have just because we have had economical stress due to the economical changes in our nation. Insurance companies equal big money. Big money equals power with the government.
          My kids better not put my FICO score on my headstone~ (quote by dspii)

          Comment


          • #6
            Originally posted by dneil View Post
            The insurance companies checking credit is so wrong. People are filing bankruptcy or not able to pay their bills which destroys their credit is for different reasons from 10 years ago. A lot of jobs have been lost. If you lose your job and are on unemployment, it makes it difficult to pay for everything that you were prior to losing your job. This insurance scoring seems so unfair. Things have changed in our economy and it has absolutely nothing to do with me or my husband being fraudulent or being a risky driver.

            I think it is absolute bull crap that they charge us more money for car insurance that we are required to have just because we have had economical stress due to the economical changes in our nation. Insurance companies equal big money. Big money equals power with the government.
            What is going on as to that is the same scenario as if you are a safe driver and never speed, no tickets for a long time, etc., etc. and one day are driving down the interstate moving with traffic that is going at a fast clip and before you know it you are pulled over for speeding. You fight the ticket and lose. The ticket tosses you into a "risk" category now as a driver who may be more accident prone and cause more risk to the insurance company even though you know you are a good driver. The same thing occurs with insurance credit profiling. Even though you lost your job and cannot pay your bills, it tosses you into that risk pool as someone who could create more risk for a car or home insurer as they believe those filing BK will file more claims. Sorta like the teacher punishing the entire classroom for one child doing the bad deed.
            _________________________________________
            Filed 5 Year Chapter 13: April 2002
            Early Buy-Out: April 2006
            Discharge: August 2006

            "A credit card is a snake in your pocket"

            Comment


            • #7
              Originally posted by FishersMike View Post
              Actually I work in the Insurance industry for one of the biggest companies. The reason for Insurance Scoring (i.e. credit scoring) is because it can be proven that statistically people with financial problems are more LIKELY to file erroneous or exaggerated claims.
              I'd love to see proof of that one. Even if it were the case why should it affect me if I am only interested in a liability only policy with the minimum required in my state. In my opinion the main factor should always be my driving history. Especially for liability coverage only. Not my zip code and not my credit.
              Disclaimer: I am not a lawyer nor giving legal advice. Use at your own risk.

              Comment


              • #8
                Hello guys - I'm in the same industry myself - and the ins "studies" that show a correlation are highly cherry picked and not open to public scrutiny, and are funded by the industry, conducted by the industry and the financial industry, and by definition are highly highly biased...pseudo-scientific at best. Obviously my credit is dirt, but knock on wood, no claims....ever.

                At any rate, there are a few companies that either don't use credit scoring or the "weight" given to them is very small. There is one large mutual that uses credit scoring but they also weigh whether you are a member of their thousands of affinity groups, your education, etc.

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                • #9
                  I guess I feel it is wrong because they consider a credit Insurance Score to beef up what they charge me and claim that my credit score and history is indicative (and supposidly research has shown) of fraudulent claims. Not just "claims", but fraudulent ones. It is the worst case of discrimination with legal rights to do so.... being judged and discriminated for our "new income level".

                  And what really gets to me (and I am tempted to swear but I wont) is that you are required by law to HAVE both car insurance and homeowners (well the banks require it of my home, but in Michigan you must have auto) and you PAY for that insurance, yet if you have to use it, your rates go up. That is Bull H E (double hockey sticks)........ Yes. We did have a claim. Someone broke into our garage and stole our guns. We got pennies on a dollar as far as "reimbursement".... and now, our homeowners has almost doubled. It is absolutely disgusting, but nothing will be done about it. You know why? Because our darned government is not ran by our elected officials. It is ran by the banks, wall street, insurance corporations and other very wealthy and powerful people.
                  We are required to pay for it. We have a false sense that "they will take care of us"... but I will tell you what, they don't. My mother was hit by a drunken driver (my dad was in the car also but didn't have the injuries like my mother) and left with multiple life altering injuries and was not allowed to return back to her factory job because of these injuries. The insurance companies gave her squat compaired to the amount she lost in her retirement and the monies she would have earned if allowed to return to work. Since all of that happened, my father died so she also lost his income. Then she lost her house because she couldn't afford her payments without him. She is now in a small apartment scraping to be able to afford the medications needed for pain.
                  The insurance companies can kiss my sun-shined moon. They are stealing our money right out from under our noses, and they are getting away with it. They have our courts approval. Who runs your life? You? Nope, all those powerful companies along with some very corrupt people. If you think there is anything such as "We The People".... you are fooling yourself there too. I wont go deep into what I think (well not much deeper) but America is definitely not what its' founding fathers had envisioned. This Land is your Land, this Land is my Land...... really? Do you have to pull a permit to build on it? Do you have to get a permit to fix a septic? Do you have to pay taxes on it as long as you live on it?

                  If you can't tell.... I am pretty fed up. Sick and tired of being the "worker ants" that pad the pockets of people who have required me to do so. Tired of paying to use the Federal Parks, or State parks. I am tired of the gas companies who are totally "taking us for a ride". I am tired of seeing people who paid on their home for years, only to have the bank yank it out from under them because they lost their job, or became sick. What? Get life insurance or job loss insurance? Really? What good does that do? They will say you were sick from alcohol, tobacco or something else that wasn't covered. They play their games and we are the pawns. Oh, how good it feels to be their little pee'ons.
                  My kids better not put my FICO score on my headstone~ (quote by dspii)

                  Comment


                  • #10
                    dneil, you're quite right - I restate my quote from a certain 19th Century gentleman living in London - you have nothing to lose but your chains.

                    Comment


                    • #11
                      This whole process has really opened my eyes. These companies exist for the sole purpose of separating you from your money - nothing else. They are always so friendly when you walk in their front door, but something goes bad for you and you try to engage with them (the right thing to do) and they modality begin the attack. I think those business people read too much into the OODA loop.

                      The other day I entered a Wells Fargo bank to cash a payroll check from my employer. The teller tried to get me to open an account with the money and I simply responded that WF accepted government bail out money...my tax money...while not making an attempt to help homeowners who were desperately trying to work something out to keep their homes. I continued and stated that I cannot do business with them for ethical reasons. In a friendly response she said that since I am not opening an account nor do I have one I would have to go through extra steps to cash the check. Figures. I happily went through the process so the bank would have to pick up the additional cost of cashing that check.

                      Comment


                      • #12
                        I've been angry about the scam of insurance scoring since I first learned of it, but until those in power have bad credit...I don't imagine it will change. I'm currently shopping for car insurance and my BK should be discharged any day. Anyone want to recommend a company? I feel my current auto agent isn't working in my favor.

                        I had auto insurance on 3 vehicles - a 4 year old Toyota Matrix with comp/collision ($500 deductible), a 95 Merc Tracer, and a 93 Saturn...the 2 latter being paid for and carrying liability only. I'm 43, divorced, with teen drivers at age 19 and 16...the 19 year old wrecked the Toyota when dodging debri in the road last year and has a couple of points on his license, making the rate $265/month. I understand the risk in teen drivers. They are both A students and the 19 year old is full time college. These are all locally driven vehicles with less than 16 miles to work/school.

                        NOW, however, I've let the Matrix go back and replaced it with a paid-in-full (yea!) 2002 Toyota Corolla. liability and uninsured at the TN state minimum for all 3 cars, no more accidents or tickets (knock on wood), and the rate is going to be $216/month? A savings of $50/month? Does that sound reasonable for those in southern states? It seems a bit much to me wen I consider I'll be paying $2600/year for 9, 16, and 18 year-old cars!

                        This is the quote from my current agent - having gone shopping yet and whipped out the credit score. Can I expect worse rates at other companies?
                        Filed Chapter 7 on 2/22/11, 341 meeting held 3/30/11, relief of stay on foreclosure 4/12/11, relief of stay on auto 5/17/11, Discharge on 6/6/11!

                        Comment


                        • #13
                          Try Liberty Mutual (www.libertymutual.com) - AND do NOT do it online - on the website you can locate local agent (employee of the company) do a face to face - if you go to their office, they can do the quotes there - there are ways around...things.

                          In addition, try to find a good INDEPENDENT agent who can quote multiple co's. However, with teens...it's hard. BUT give these two ideas a try.

                          You can also get a bit of a discount if you have renters/homeowners ins with the same co that you have your car ins through.

                          Also, does your employer offer any access to such ins through...the employer?

                          Originally posted by Clabbergirl View Post
                          I've been angry about the scam of insurance scoring since I first learned of it, but until those in power have bad credit...I don't imagine it will change. I'm currently shopping for car insurance and my BK should be discharged any day. Anyone want to recommend a company? I feel my current auto agent isn't working in my favor.

                          I had auto insurance on 3 vehicles - a 4 year old Toyota Matrix with comp/collision ($500 deductible), a 95 Merc Tracer, and a 93 Saturn...the 2 latter being paid for and carrying liability only. I'm 43, divorced, with teen drivers at age 19 and 16...the 19 year old wrecked the Toyota when dodging debri in the road last year and has a couple of points on his license, making the rate $265/month. I understand the risk in teen drivers. They are both A students and the 19 year old is full time college. These are all locally driven vehicles with less than 16 miles to work/school.

                          NOW, however, I've let the Matrix go back and replaced it with a paid-in-full (yea!) 2002 Toyota Corolla. liability and uninsured at the TN state minimum for all 3 cars, no more accidents or tickets (knock on wood), and the rate is going to be $216/month? A savings of $50/month? Does that sound reasonable for those in southern states? It seems a bit much to me wen I consider I'll be paying $2600/year for 9, 16, and 18 year-old cars!

                          This is the quote from my current agent - having gone shopping yet and whipped out the credit score. Can I expect worse rates at other companies?

                          Comment


                          • #14
                            Originally posted by Clabbergirl View Post
                            I've been angry about the scam of insurance scoring since I first learned of it, but until those in power have bad credit...I don't imagine it will change. I'm currently shopping for car insurance and my BK should be discharged any day. Anyone want to recommend a company? I feel my current auto agent isn't working in my favor.

                            I had auto insurance on 3 vehicles - a 4 year old Toyota Matrix with comp/collision ($500 deductible), a 95 Merc Tracer, and a 93 Saturn...the 2 latter being paid for and carrying liability only. I'm 43, divorced, with teen drivers at age 19 and 16...the 19 year old wrecked the Toyota when dodging debri in the road last year and has a couple of points on his license, making the rate $265/month. I understand the risk in teen drivers. They are both A students and the 19 year old is full time college. These are all locally driven vehicles with less than 16 miles to work/school.

                            NOW, however, I've let the Matrix go back and replaced it with a paid-in-full (yea!) 2002 Toyota Corolla. liability and uninsured at the TN state minimum for all 3 cars, no more accidents or tickets (knock on wood), and the rate is going to be $216/month? A savings of $50/month? Does that sound reasonable for those in southern states? It seems a bit much to me wen I consider I'll be paying $2600/year for 9, 16, and 18 year-old cars!

                            This is the quote from my current agent - having gone shopping yet and whipped out the credit score. Can I expect worse rates at other companies?
                            I've had people try to quote me $180 a month for just myself, liability only on a 18 year old vehicle! It pays to shop around. In actually my current rate is about $50 a month. I usually found 20% are sky high, 60% are about average, 20% are below average. It pays to find that 20%. And don't just stick to the big name companies like Geico.
                            Disclaimer: I am not a lawyer nor giving legal advice. Use at your own risk.

                            Comment


                            • #15
                              try liberty mutual!

                              Comment

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