by renditioner » Sun Aug 24, 2008 03:56 pm
How bad your credit score can affect your insurance premiums ?I have a friend whose credit score sucks and he went for renewal of his car insurance the other day and the insurance company guys said his premiums have increased as is credit score is bad .Did any of you guys experience this kind of thing with any of your insurance companies?
Posted: Tue Aug 26, 2008 12:13 pm Post Subject:
Donno why do we always blame it on God...& at the same time pray to God when we don't have anything out of it.
I don't see anyone 'blaming' God...help and guidance of course, but see no one blaming him...Posted: Tue Aug 26, 2008 04:43 pm Post Subject:
I agree with my fellow posters. Renditioner, though there is no direct correlation between the credit score and insurance, but its gradually becoming a trend.
Finally, someone on the same boat. :)There is no denying the fact that people with lower credit scores file more claims. But the policy should be rated on risk and exposure, _not_ the likelihood that someone will hold the insurance company accountable for their promise if a loss is suffered. That is, "poor" people are more likely to file a claim when then suffer a loss... there is no indication that they actually have more losses (remember, they only file more claims).
It's allowed except in the states that have disallowed it. That is, more and more states are catching on and not allowing this practice. It's only when the people find out it's being done that they can say anything and insurance companies certainly are not advertising this fact.
Posted: Thu Sep 04, 2008 02:10 am Post Subject:
It has nothing to do with the customer's likelihood of paying the premiums. There is a statistical link between a low credit score and a higher incidence of claims. Whether or not there is an actual *causal* link is a different debate, but a statistical link exists. This is the sole basis for this decision on the part of the insurance companies.
This is hardly a new practice. It's been going on for years.
Posted: Thu Sep 04, 2008 03:30 am Post Subject:
Here is the bottom line... it's financial discrimination. A few states have seen fit to make it illegal (as it crosses the line).
Your also incorrect in that there there are two different things being discussed, having a loss and filing a claim. It's not a question of statistical vs casual links. A premium should be based on _risk_ and _exposure_... not the probability that someone will use what is being sold.
I'm not against increasing rates once a loss has been sustained... this goes to risk. But to judge _if_ someone is likely to use the policy (not likely hood of having a claim) and basing their rate on this is wrong.
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