Date:         Sat, 8 Feb 2003 08:49:51 -0500
Reply-To:     Gary Stearns <gstearns@OPTONLINE.NET>
Sender:       Vanagon Mailing List <vanagon@gerry.vanagon.com>
From:         Gary Stearns <gstearns@OPTONLINE.NET>
Subject:      Re: Insurance and credit checks
Content-type: text/plain; charset=iso-8859-1

I'm an insurance agent in Connecticut where this is happening too, except
not as you describe.  Most insurance companies require that we run a "credit
based insurance score" .  Though it does appear as a credit check on your
credit rating, it doesn't affect the rating.  The use of insurance scores is
a choice made by the companies, it's not required by law.  When introduced
here, I too wondered what this had to do with auto insurance.  Slowly I
learned that there has been study after study done showing that people that
don't pay their bills or live beyond their means also have more insurance
claims.

The agent does not get your credit history when they request this score.
They get only a letter or number grade.  They then plug this grade into the
insurance rating program to produce a final premium.  All of the companies
that we represent use this score to give you lower premium as well as a
higher one.  The reason that most insurance agents don't like this system is
because of the public misperception.  My staff spends far too much time
having to respond to confused clients who rightfully ask "what does my
credit rating have to do with auto insurance" .  Worse is when the score
comes back with a poor result; something's going on in the credit history
that our client doen't know about.  We are forced into discussing credit
history and trying to convince them that we have no idea what's causing the
problem and that they'll have to contact the credit rating bureau to find
out.

Though it's a useful underwriting tool to evaluate a potential insured, it's
doing some public relations damage to an industry that's damaged already.  I
don't like insurance scoring either.

Gary

--- Original Message -----
From: "Gregory Smith" <budgetzagato@YAHOO.COM>
To: <vanagon@GERRY.VANAGON.COM>
Sent: Saturday, February 08, 2003 12:19 AM
Subject: Insurance and credit checks


> John Brush <jbrush@AROS.NET> wrote:
>
> "Not sure if it matters, but it really bugs me. Here
> in Utah, if you ask for an insurance quote, the law
> says that you have given permission to the insurance
> company to do a credit check on you.
>
> I am told that every time someone checks your credit,
> your rating drops.  Kind of prevents me from shopping
> around very much for an insurance quote."
>
> --------
> Actually although they do check, it doesn't count
> against you.  The list of recent inquiries to your
> credit only show on the version available to you and
> do not affect your rating or index.
>
> A nice side affect is every time it's checked, you are
> entitled to a free copy.  And it's usually a phone
> call away.  Always nice to see who's been
> impersonating you.
>
> My insurance agent told me they have figured that your
> credit rating is a more accurate way to rate you as a
> risk.  Then he said my index was better than his!  :)
>
> Gregory Smith
> '84 Vanagon
> Olympia, WA
>
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