New bill would stop Insurance companies from using

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PostPosted: Sat Jan 26, 2008 3:47 am   Post subject: New bill would stop Insurance companies from using  

Credit Score as part of setting your premium. I have put a link to the news under "latest info and news" but thought I'd mention it here to as it could possibly affect many of us. Actually until recently I did not know that insurance company even used your credit score as a factor in setting your premium but once I found out I researched it and found that almost ALL of them do.



Here is an excerpt from the bill



Quote:
Insurance providers would be prohibited from setting premiums based on credit scores under legislation proposed by Rep. Dorothy Butcher, D-Pueblo.



The House Business Affairs and Labor Committee on Thursday approved House Bill 1143 by a vote of 6 to 5.



But an association representing the insurance industry vowed on Friday to fight the legislation on the House floor.



Butcher said the current policy is unfair because there's no correlation between credit and risks.




To read the full article just go to news and info here on AmPM site.


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PostPosted: Tue Jan 29, 2008 5:24 am   Post subject:   

Quote:
Actually until recently I did not know that insurance company even used your credit score as a factor in setting your premium but once I found out I researched it and found that almost ALL of them do.




Yeah its a growing trend. More and more insurers are referring to the credit report to determine the fate of the applications they receive. And accordingly they are charging higher premium to an individual with poor credit score, or, at times even denying coverage all together. Though seemingly there is no direct correlation between the credit score and the risk, but according to the proponents of the theory, 'people with lower credit scores are tend to file more claims, which in turns increases the cost of insuring them'. This theory may or may not be correct, but hopefully this bill will put a stop to this practice.



Thanks,

Carol
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PostPosted: Tue Jan 29, 2008 5:56 am   Post subject:   

I guess the insurers have enough determinants, like-the age of the driver, financial ability of the applicant, his/her health condition and so on, to ascertain the cost associated with covering him/her. Why they need the extra help of credit score to evaluate the risk? Does my poor credit score depicts that I'm a poor driver? I've never filed a claim with my insurer till date.


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PostPosted: Tue Jan 29, 2008 6:19 am   Post subject:   

Mega you are doing a commendable job of bringing the latest happenings of the insurance industry to our knowledge. Its nice to see that someone is taking up the responsibility of enlightening the community with the industry related news.



In ampminsure our motto to create a community; geared with financial knowledge, and your sincere effort is acting as the catalyst towards it.



Hope you succeed in your mission.



Regards,

Juanita

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PostPosted: Tue Jan 29, 2008 1:00 pm   Post subject: Thank you all for joining this thread  

And thank you Juanita for those kind remarks. To be honest I am really enjoying this board because of all the sincere post that most everyone is making.



I trade a lot in the stock market and I see daily how most are only "out for themselves" when the obvious way to make money and succeed in trading stocks would be for everyone to share informative, factual and honest opinions about individual companies or stocks. But for some reason that just don't happen.



And here I see a community working together to both gain knowledge about the insurance industry and to help others by sharing what they do know. It's GREAT. I wish there were more sites as open and friendly as I have found this one to be.



Again, thank you very much for that post. I appreciate it!



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PostPosted: Fri Feb 01, 2008 9:40 am   Post subject:   

Quote:
And thank you Juanita for those kind remarks. To be honest I am really enjoying this board because of all the sincere post that most everyone is making.




You are welcome Mega and I'm more than glad to hear your remark about this community. Hope the enjoyment persists.



Quote:
I trade a lot in the stock market and I see daily how most are only "out for themselves" when the obvious way to make money and succeed in trading stocks would be for everyone to share informative, factual and honest opinions about individual companies or stocks. But for some reason that just don't happen.




Bingo!! It always pay-off to know more. But because of the fast-pace of our lives we often miss out on information and news, which is of our interest. It's really nice that you have joined the community. You are really doing a great job. Smile



Regards,

Juanita
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PostPosted: Fri Feb 01, 2008 9:43 pm   Post subject: I agree Juanita  

For example I have 20+ years in the auto industry as a salesman, manager and buyer. So I am sure there are some things I can share from the auto side of things with that many years experience of dealing with all sorts auto's that others may not know. Yet there are also probably many here with a lot of Auto Insurance Sells experience that can provide a lot of knowledge about what the best way to purchase and what to purchase and how to file claims ect.



I think we each can help where we can and everyone can benefit.



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PostPosted: Fri Feb 01, 2008 10:49 pm   Post subject:   

mega, I am sure that you will be a great asset here, you have already posted some great posts.

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PostPosted: Thu Feb 07, 2008 2:43 pm   Post subject:   

Does that mean that a bill was passed to stop the insurance companies from using your credit score against you? Sounds like it,and if it was then why are they still doing it or are they. My son made foolish choices and now had bad credit so now does that mean that is one reason his insurance premiums are so high? Not the only reason but one of the reasons?

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