Community Chat

[missy1]

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@WenGirl42 wrote:

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@AngusandBuddhasMom wrote:

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@missy1 wrote:

IMO they don't go hand in hand. You could have a high credit score when starting the policy, and then go to a low rating. (due to medical bills etc.)  My insurance never checked my scores, neither have my employers. Most people would pay their car insurance, before a credit card/etc. Poor credit score, doesn't mean more accidents.

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Not always  but it does give them an idea of how you pay your bills.

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Actually, across the population (which is how statistics are determined), yes poor credit score DOES mean more accidents. 

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Maybe those  findings are because more people have poor credit scores than not.???

[WenGirl42]

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@missy1 wrote:

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@WenGirl42 wrote:

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@AngusandBuddhasMom wrote:

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@missy1 wrote:

IMO they don't go hand in hand. You could have a high credit score when starting the policy, and then go to a low rating. (due to medical bills etc.)  My insurance never checked my scores, neither have my employers. Most people would pay their car insurance, before a credit card/etc. Poor credit score, doesn't mean more accidents.

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Not always  but it does give them an idea of how you pay your bills.

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Actually, across the population (which is how statistics are determined), yes poor credit score DOES mean more accidents. 

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Maybe those  findings are because more people have poor credit scores than not.???

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No...that's not how statistics work.  Actuarial or otherwise.  All other things being equal, people with a lower credit score are more likely to get into accidents or have the accidents they do get into cost more (either way, be a worse risk for the insurance company) than people with a higher credit score.  Same could be said for people who live in one state vs. another, are single vs. married, drive one type of car vs. another...the list of segmentation options that insurance companies have is quite long, and these are all factors that determine an individual's rate.

[ChynnaBlue]

Credit reports are used for all kinds of things now, and most of them are terrible.

If you have bad credit, you probably don't have a lot of money. But the credit card companies will charge you more to get a card, so now you have even less money to pay them back than you did before. Insurance companies charge you more, even if you have a great driving record, so now you again have less money to pay bills. Many employers now check credit ratings, and if a  company refuses to hire you based a poor credit rating, now you have almost NO chance of paying your bills and getting out of debt. It's one more way to keep the debt cycle going and keep people in poverty.

[Kalli]

We had the same insurance company for almost 30 years.  DH and I both have excellent credit scores.  We had 2 fender benders in our own driveway, he backed into a tree while plowing our driveway and I slid into a different tree after a storm.  The cost to fix was about $6000 total.  And they cancelled us as soon as they paid for those repairs.

Long story short, we took ALL our policies away, including those associated with DH's business.  A different agency was all too happy to take us on as new customers and my monthly bill is now 1/3 of what it had been - for the same coverage!  Wish Trav lers  had cancelled us sooner!!

[guatmum]

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@WenGirl42 wrote:

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@missy1 wrote:

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@WenGirl42 wrote:

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@AngusandBuddhasMom wrote:

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@missy1 wrote:

IMO they don't go hand in hand. You could have a high credit score when starting the policy, and then go to a low rating. (due to medical bills etc.)  My insurance never checked my scores, neither have my employers. Most people would pay their car insurance, before a credit card/etc. Poor credit score, doesn't mean more accidents.

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Not always  but it does give them an idea of how you pay your bills.

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Actually, across the population (which is how statistics are determined), yes poor credit score DOES mean more accidents. 

---

Maybe those  findings are because more people have poor credit scores than not.???

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No...that's not how statistics work.  Actuarial or otherwise.  All other things being equal, people with a lower credit score are more likely to get into accidents or have the accidents they do get into cost more (either way, be a worse risk for the insurance company) than people with a higher credit score.  Same could be said for people who live in one state vs. another, are single vs. married, drive one type of car vs. another...the list of segmentation options that insurance companies have is quite long, and these are all factors that determine an individual's rate.

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Please cite your source for the above bolded segment of your comment.  I'd love to see reliable, long-term, valid statistics that prove it.  

ETA:  Please don't cite actuarial statistics about single people as a population v. married.  They count anyone over the age of 18 as an adult.  In doing so, they include in the "single" category a disproportionate amount of under 25 single v. the married group. This makes the average age and experience of the "single" group MUCH lower than that of the married group.  The statistics on "singles" has little to do with anyone over the age of 30 who is single yet those statistics are used anyway.  It's easy to see that, rather than marital status, it's age and experience of the driver that makes the difference. Unfortunately, insurance companies have no incentive to think that logically about it.  I'm sure the same kind of analysis can be made with the statistics on those with high credit scores v lower credit scores but that would take some thought and intelligence, which insurance companies don't find beneficial to their bottom line.  That's one of the big reasons I changed my profession.

[Lucky Charm]

My last full time job was as an auto insurance underwriter. 

Back then, our customer service reps didn't even need to be licenced.

So insureds would call in to make a change or just ask a simple question.  At the end of the call, the CSR would ask the insured if they had time to answer a few questions.

Questions included, single/married, rent/own, work/retired and a few others I can't recall.

Anyways, the answers could in fact raise the next renewal premium,  unbeknown to the insured. 

The kicker was, if the insured didn't have the time to answer the questions, they may've saved themselves some money. 

Unbeknown to them.

Is 'unbeknownst' not a word?

[guatmum]

LOL!  Yes, unbeknownst is a word.  

[Mothertrucker]

Prospective Employers use credit scores now in making hiring decisions....

[AngusandBuddhasMom]

For the past 20 plus years company's have used credit reports for hiring prospective candidates. 

[Lucky Charm]

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@AngusandBuddhasMom wrote:

For the past 20 plus years company's have used credit reports for hiring prospective candidates. 

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True.

I always thought that they should also pull driving records of those in the auto insurance business.

I knew a handful in underwriting, actuarial, and compliance that had dui's.