Health Insurance Premiums Higher Due to Bad Credit??

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PostPosted: Tue May 12, 2009 6:28 pm   Post subject: Health Insurance Premiums Higher Due to Bad Credit??  

I had a client call me and say that her insurance is very expensive because she is in the process of dealing with the aftermath of a bankruptcy (her soon to be ex-husband declared it causing her some trouble as well).



I am very familiar with the practice of higher premiums from Homeowner's and Auto Insurance...and I understand the reasoning. I was not aware that health insurance companies looked at credit as well. Is she mistaken? Or does anybody know that a health insurance company can raise premiums due to poor credit?



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PostPosted: Tue May 12, 2009 8:34 pm   Post subject:   

Insurance companies deal with money. They would want that they are safe at every place. So they identified 2 types of risks.

1. People with hobbies like rock climbing, car racing in which they may lose their life. So their premiums are higher.

2. People with a bad credit Insurance companies also worry that people with bad credit or a bankruptcy in their past might not pay their insurance premiums. Hence, they charge a higher premium on people with a bad credit.

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PostPosted: Tue May 12, 2009 9:47 pm   Post subject:   

I was always told that property and casualty premiums were much higher for people with poor credit because more claims and lawsuits can be attributed to lower income / worse credit individuals. Anybody know that justification to be true?



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PostPosted: Wed May 13, 2009 1:42 am   Post subject: insurance  

I think this subject was on the Forum, somewhere, sometime back. If you are applying for Medical/Health Insurance, do these people have the right to look at your credit? Aren't they suppose to make you aware that they are 'eyeing' your credit? I think someone said on the Forum that Insurance companies look at your credit for Auto policies, as well. Is this true?

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PostPosted: Thu May 14, 2009 12:08 am   Post subject:   

When applying for an auto policy you are normally asked to supply your social security number. It is common for insurance companies to use this information to check credit, and they are required to notify you that they are doing that. I knew that health insurance companies looked at the MIB, but wasn't aware they looked at credit as well.

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PostPosted: Thu May 14, 2009 3:12 am   Post subject: insurance  

Mmmm.if they DO check your credit, would it be a 'Hard Inquiry'? If my Insurance company DID check my credit, before I signed up for a policy, I din't know they did ( if they told me they did, I just don't remember).

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PostPosted: Fri May 15, 2009 10:57 am   Post subject:   

I don't think it would be a hard inquiry. Wow when they say your credit follows you evrywhere it really does. I can see it in some things but not all. Health care may be taking it a bit far especially for those whom lost their job and fell into hard times.

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PostPosted: Sun May 17, 2009 8:55 pm   Post subject:   

It would not be a hard inquiry, it would be a soft inquiry. The only things that result in hard inquiries are instances in where you are requesting credit. For example, if a car dealership runs it...it is a hard inquiry. Now if a utility company, insurance company, or cellular phone company runs it...they are looking to see your score and a general pay history to see how much of a risk you are. You are not requesting credit from them, rather you are asking them to do business with you (in some cases without charging a large deposit.)



They are soft hits...which are actually still looked at by bankers and loan agents. The hard hits impact your credit score, but the soft hits (and more specifically the nature of) can also influence a lending decision.



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PostPosted: Mon May 18, 2009 5:19 am   Post subject:   

Quote:
I am very familiar with the practice of higher premiums from Homeowner's and Auto Insurance




You are right Chris, it has become a practice for the insurers to dig into your credit report before issuing the policy. Whether its a right thing to do or not... well that's a different debate.



Quote:
I was not aware that health insurance companies looked at credit as well. Is she mistaken?




May be not. At this given economic condition the insurers can go to any length to get a secured business by minimizing risk undertaking. And we all know bad credit reflects poor money management skills.



Thanks,

Rupert
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PostPosted: Mon May 18, 2009 10:55 am   Post subject: insurance  

Even if Insurance companies look into your credit..for WHATEVER reason, aren't they suppose to tell you? What if you DON'T give them permission? Can your Insurance payments be high BECAUSE of bad credit? That just deosn't seem fair for some people..ya know?

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PostPosted: Mon May 18, 2009 11:36 am   Post subject:   

Sd, there are many such things which aren't fair. Would you like paying more for someone who has a bad credit and is frequent in filing claims? You probably know that the claims are paid from the pool created by all the policy holders. Therefore, if someone is a bad risk it would affect the premium of all. The insurers associate bad credit with recklessness and as Rupert has mentioned weaker money management.

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PostPosted: Mon May 18, 2009 2:47 pm   Post subject: insurance  

SIMON>>>>>>> I see your point on this. I have a good driving record. I don't want to have to 'pay' a HIGHER payment, for those who DO have bad driving records. I am asked ( almost on a daily basis), by a neighbor, if she can use my car. Well..........FIRST of all, she doesn't own a DL ( because of too many DUI's. SECOND of all, she has an attitiude that the "world owes her", etc. She doesn't have Insurance, either.

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PostPosted: Mon May 18, 2009 8:02 pm   Post subject:   

I have never had a client rated up due to bad credit. I am not familiar with any health insurance companies that do so.



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PostPosted: Tue May 19, 2009 3:27 pm   Post subject: Bad Credit  

Health Insurance Carriers DO NOT MARK ANYONE up for "bad credit"

They only markups you will receive in health insurance if for "Bad Health"



I am 100% positive on this.



Wesley Brinson

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PostPosted: Tue May 19, 2009 4:28 pm   Post subject:   

Disability coverage is a subset of health insurance and people have been turned down for bad credit.



I have not seen this for traditional health insurance, but, there are 50 states, and what is true in one state doesn't have to be true in another.



Wesley, are you 100% positive for all 50 states?

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