Insurance Rates

[GGT]

The original story posted mentioned that they don't use the credit score. Furthermore EACH company is different. For all I know one company just uses the credit score. Another may not. In the competitive insurance industry different companies are going to approach underwriting in a different fashion. And that is a GOOD thing.

So you don't know. Only the insurers know, and they're not telling.

From your article, again:

Insurance companies don’t use a score provided by one of the big credit bureaus. They create their own “insurance score” using their own criteria. It’s a secret formula; they won’t tell you how your score is computed. In many states, insurance companies aren’t even required to tell customers their credit history was used to set their premium.

“The secrecy behind this credit scoring is part of what makes it so inherently unfair,” Kreidler says. “No two companies use it the same way and when consumers ask, they can’t get a straight answer on how to get a better score.”

Lewk, how do you expect "people to understand", with this kind of secrecy?

Are you just a shill for your employer, or what?

[Lewkowski]

Sigh. You can extrapolate common sense findings. Oh look your premium went up when your credit profile dived. Wow there must be a connection. Some states require notification before using the credit profile. And yeah whats wrong with keeping secrets on how rates are determined. Basic truths are easy to see - don't cause accidents, don't get tickets, pay your bills on time.

Should we be demand to know how Target figures out the price of goods on the shelf?

[GGT]

And you wonder why consumers want the industry regulated. Tell us which company you work for, that'd be a hoot.

[Weber]

And you wonder why consumers want the industry regulated. Tell us which company you work for, that'd be a hoot.

I'd like to know as well.

[']['ear]

Me too. I bet Consumer Reports gives it a crappy rating.

[Lewkowski]

And you wonder why consumers want the industry regulated. Tell us which company you work for, that'd be a hoot.

What don't you want regulated?

[GGT]

Sigh. You can extrapolate common sense findings. Oh look your premium went up when your credit profile dived. Wow there must be a connection. Some states require notification before using the credit profile. And yeah whats wrong with keeping secrets on how rates are determined. Basic truths are easy to see - don't cause accidents, don't get tickets, pay your bills on time.

Insurance scoring is not logical nor is it common sense. It's not as simple as avoiding accidents or tickets, or paying bills on time. You acknowledged this. They can also penalize based on marital status, employment changes, zip code, bankruptcies, asset holdings (if the insurance company is owned by your bank, they can share account information).

Using credit reports and FICO scores is also suspect, since those ratings aren't always accurate, they only show snap shots in time---of the past---they don't necessarily predict future spending and credit habits. People contest credit/FICO all the time, they're full of errors, they change monthly/yearly.

Secretive ways of underwriting and rate-assigning means the consumer can't fully buy (or negotiate) the product or service they want. The whole point of insurance is to benefit and protect the consumer, but we're penalized for using the very service we buy if we make a claim.

Should we be demand to know how Target figures out the price of goods on the shelf?

Irrelevant.

What don't you want regulated?

Irrelevant.

Why don't you just admit it: the insurance industry isn't trying to predict our risk of a car accident as much as they're trying to hedge bets on whether we'll file claims.

[Lewkowski]

Why don't you just admit it: the insurance industry isn't trying to predict our risk of a car accident as much as they're trying to hedge bets on whether we'll file claims.

I've said it already in this thread. But if you want me to be specific. Yes insurance underwrites the risk of claims. That includes accidents, theft, vandalism to your car and non-moving accidents (your parked car gets damaged but something). And when underwriting this risk, why shouldn't the insurance companies stick higher prices to those who file more claims?

Insurance scoring is not logical nor is it common sense. It's not as simple as avoiding accidents or tickets, or paying bills on time. You acknowledged this. They can also penalize based on marital status, employment changes, zip code, bankruptcies, asset holdings (if the insurance company is owned by your bank, they can share account information).

And I don't see a problem with this. If it turned out that people with the last name of L are more likely to file a claim then other folks whose last name doesn't start with a L and insurance decided to raise rates on everyone with a last name that starts with an L... I wouldn't be pleased at the higher rate but I wouldn't be calling for the insurance company to be regulated. Because I believe in freedom and a free market.

[GGT]

I've said it already in this thread. But if you want me to be specific. Yes insurance underwrites the risk of claims. That includes accidents, theft, vandalism to your car and non-moving accidents (your parked car gets damaged but something). And when underwriting this risk, shouldn't the insurance companies stick higher prices to those who file more claims?

Because that's not where they limit their crystal ball gazing. They go on the assumption someone might file a claim using bogus potential factors. Charge more for people who drive to restaurants in the city and have a martini with dinner? How about if they use a cell phone while driving?

After people file a claim for damages, which is what insurance is supposed to offer, they ding you and raise premiums. Nobody is falling for the "Lookie at us, we've got big hearts, we have "accident forgiveness" for your first claim!

They're charging on assumptions, then charging for using the product. The only reason they get away with this is (a) insurance is required by most state law, and (b) underwriting is not regulated like premiums are. Nice scheme.

And I don't see a problem with this. If it turned out that people with the last name of L are more likely to file a claim then other folks whose last name doesn't start with a L and insurance decided to raise rates on everyone with a last name that starts with an L... I wouldn't be pleased at the higher rate but I wouldn't be calling for the insurance company to be regulated. Because I believe in freedom and a free market.

Of course you don't see a problem. You're a shill for your insurance company employer. You know damn well this isn't freeeedom and freeeeee market operations at work. It's industry bullying to make profit, with protections thru congress.

You're advocating profiling based on things that don't prove causation and may well be discriminatory without basis. Might as well try that with "foreign sounding last names" like Yun or Li or Szinski. As long as you get a paycheck from Allstate or whomever, you don't really give a crap who they extort or how it's done.