Rashida Talib want auto insurance companies to not be allowed to check credit scores

[Fueri]

Insurance is pre-paid, so it has little to do with who will pay and who wont. if you dont pay you are dropped.

It has more to do with a correlation wrt to claims likely to be filed.

Personally, while I understand it, I think it sucks. I worked in insurance at one time and always hated having to explain to someone that had never filed a claim, had an accident etc., why their rates suddenly jumped.

Contrary to what some people think it isnt just raw credit score, it is a variety of factors that go into calculating an insurance score, including, for instance, hard pulls, so someone that is buying or refinancing a house and has otherwise stellar credit gets dinged. someone who marries someone with not perfect credit or something major, such as a bankruptcy or foreclosure would often really get hammered, etc.

It is also true that all insurance companies do not apply all of this equally, or on a straight scale, in other words I saw many examples of companies cherry picking prosspective customers based an these scores and giving "fuck you" pricing to others, effectively pushing them out the door.

Unfortunately, that's the system until they find something else to try to predict and underwrite risk....

Simply come up with an insurance equivalent to the credit score using industry data. Claims, years of coverage, payment history, overall coverage( ie home, health, auto, life).
Obviously someone who uses multiple policies over multiple years would have a higher score. It shouldn't be hard to track how someone uses insurance over time.

You'd think so and yet the actuaries will argue that this component is a strong indicator.

I had a fairly long conversation about this with a Senior VP of my region, who came from an actuarial background, about this very topic. His claim was that this was one of the most positively correlated data points in the data set.

They will be very loathe to let it go. Their lobby dollars will almost certainly kill it, IMO. They know that game too...

That's exactly right.
The insurance industry holds all the data they need but still go outside their industry for data because that allows for higher premiums.

SMH.

Higher profits, not necessarily higher premiums. Some people pay more, but they will often move to lower tier companies as A+ insurers effectively push them out the door by pushing their rates up.

2 ways to maximixe profits.

1. Jack rates
2. pay out less in claims.

Insurance is a fairly competitive, commoditized product for which the consumer has a wide range of options, so paying out less is a huge element of all of this, imo, in terms of maximizing profits.

in other words, imo, some companies are attempting to increase profits by attempting to move possible future claims out the door. Theyre not necessarily correctly pricing the risk as attempting to avoid it in some cases altogether, imo.

Some companies not all that long ago, got called out for using this strategy of minimizing payouts to maximize their profits by delaying and denying claims, among other things-and it worked.

that is a tale it is likely the insurance industry would rather people forget about.....

 

[Admiral Rockwell Tory]

Insurance is pre-paid, so it has little to do with who will pay and who wont. if you dont pay you are dropped.

It has more to do with a correlation wrt to claims likely to be filed.

Personally, while I understand it, I think it sucks. I worked in insurance at one time and always hated having to explain to someone that had never filed a claim, had an accident etc., why their rates suddenly jumped.

Contrary to what some people think it isnt just raw credit score, it is a variety of factors that go into calculating an insurance score, including, for instance, hard pulls, so someone that is buying or refinancing a house and has otherwise stellar credit gets dinged. someone who marries someone with not perfect credit or something major, such as a bankruptcy or foreclosure would often really get hammered, etc.

It is also true that all insurance companies do not apply all of this equally, or on a straight scale, in other words I saw many examples of companies cherry picking prosspective customers based an these scores and giving "fuck you" pricing to others, effectively pushing them out the door.

Unfortunately, that's the system until they find something else to try to predict and underwrite risk....

Simply come up with an insurance equivalent to the credit score using industry data. Claims, years of coverage, payment history, overall coverage( ie home, health, auto, life).
Obviously someone who uses multiple policies over multiple years would have a higher score. It shouldn't be hard to track how someone uses insurance over time.

If its such a great idea to disregard credit scores in determining risk and premiums for automobile insurance, liberals should get the leftist insurance companies to show how its done and quit first. Get Progressive Insurance as well as Geico- owned by socialist billionaire Warren Buffett- to do it first. The other insurance outfits can see how much more they are making with their new pricing scheme, and will follow suit.

Progressive is a public company. Buffett does not own it. His holding company does own Geico.

 

[Polishprince]

The principle that the insurance companies work on is the principle that those that are riskier to the company have to pay more.

True, but that's not an ethical or moral principle. It's a mathematical principle they are forced to adopt. They are forced by the market to operate that way, or they will lose market share to companies who do.

I think it is an ethical principle. The pricing policies protect the dividends and investment of the widows and orphans who rely on the stock issued by the insurer, protects the ability of the firm to pay claims by not writing riskier policies without more compensation.

 

[Andylusion]

What does that matter? It's their insurance company. Their policies. Their services. It's isn't ours. They can do whatever checks they want.

Well, since auto insurance is generally mandatory, it matters more than it would otherwise.

So if I offered you a service, and then you yourself voted for politicians to require you buy the service I offered.... then magically I'm your slave, and you can dictate how I run my business? No.

The fact you want my service, doesn't mean you can control me, no matter what the law says.

Slippery slope to slavery right there. We made a law saying I must have insurance, so now I can use that law to justify controlling the insurance company.

 

[Fort Fun Indiana]

I think it is an ethical principle.

In your mind maybe, but not in practice in insurance companies. It is an action forced by the market.

 

[Fort Fun Indiana]

So if I offered you a service, and then you yourself voted for politicians to require you buy the service I offered.... then magically I'm your slave, and you can dictate how I run my business? No.

Well, thats overstated, as a few regulations do not constitute that. And you are clearly wrong anyway, as we regulate nearly every industry that exists. Personally, I'm glad restaurants have to have a minimum hot water temperature and hand wash stations. But good luck with your principled argument from the year 1820.

Nevertheless, there is a worthwhile point in there. If something like this is made mandatory by law,it compels more regulation. The only real solution to that problem is a public option. That's probably not feasible, in the case of auto insurance.

And so here we are, wrangling with ethical questions that are not cut and dry.

 

[Hutch Starskey]

There is nothing in my credit score that can predict if I file a claim for repairs after a hailstorm, tree falling, someone hitting me in a parking lot or parked on the street.

Undortunately, that is just not accurate, from an analytical standpoint. The statistics show otherwise. The data show a strong correlation between credit profile and risk of both valid claims and adverse action.

Nonsense. The only way that is possible is if someone with a great score is wealthy enough to cover the repairs without a claim.
But even then why would you if the vehicle was significantly damaged? The owner still needs to cover their loss.

 

[Remodeling Maidiac]

Good. What does credit have to do with veing a good or bad driver?

Nothing.

Her idea is a good one.

 

[Wyatt earp]

Defending insurance companies . Is there no evil company/industry that conservatives won’t back?

Whoah there, put on the brakes. Contrary to what people may think, insurance companies actually make an effort for fairness. If they don't, their profits suffer. Because their competitirs will make this effort, and the better qualified customers will get better rates elsewhere. It's just not so cut and dry as you seem to think.

bullshit the car insurance companies are in cahoots with the government, they are the ones who got passed mandatory insurance, God damn if a poor persons car breakdown and he cancels his insurance, they will jack up his rates when he gets insurance again.

all they want is MONEY

Try editing that post so it appears to be English.

what you cant comprehend it fuck face?

 

[Wyatt earp]

bullshit the car insurance companies are in cahoots with the government,

Nah, that's freakish conspiracy nonsense to which no mind should be paid. Actuarial science decides insurance rates, and underwriters decide whobgets insurance. And actuarial science shows that lower auto insurance report scores correlate well with increases risk. That's simply a mathematical fact. Whether or not it is a fact is quite independent of whether or not you like it.

Science my ass fuck head, they are in CAHOOTS with the government, my car insurance should be $5 bucks every 6 months since I have not had a ticket or claim in 30 years.

You know. in some states, you don't have to have car insurance if you post a bond to indemnify yourself against claims against you.

yea if you are rich, let me guess you are a rich guy who wants people to pay for you to have lower car insurance? Wisconsin was the last state

 

[Remodeling Maidiac]

i think credit score information is overused and abused. It is time to put some brakes on it.

So are criminal records.

 

[Fort Fun Indiana]

Nonsense

You can stop right there. You are 100% wrong. The statistics show what they show. And, when determining risk over a large risk pool, nobody cares what Hutch Starskey had for breakfast or what his character is. These are mathematical algorithms.

The numbers show that credit profile correlates very well(as mentioned twice in this thread, as well as or more well than any other data point) with risk of filed claims and adverse action. This isn't an ethical or moral stance, its simply an algorithm.

You would be correct to call it "mindless" or "amoral" or even "unfair", in some cases. But you would not be correct to claim this stark, clear correlation does not exist. Again, there is no mind paid to moral principles or causation, here. It's simply correlation and mathematics.

 

[Wyatt earp]

Tlaib bill would prohibit use of credit scores to set car insurance rates

She’s almost as bad as AOC and Omar

I am with her on this, You could have 5 D.U.I.s , 8 car crashes and have cheaper car insurance then someone with a perfect driving record, with a bad credit score.

Says someone with either a bad driving record or lousy credit score!

I have a perfect driving record the past 34 years fuck face AND A GOOD CREDIT SCORE, ONCE AGAIN ASSHOLE WHAT DOES CREDIT SCORE HAVE TO DO WITH DRIVING A CAR?


You must be a car insurance sales man, it was a fucking scam, for poor people to subsidize crappy ass rich drivers, just like its a scam for poor people to subsidize rich people and their Electric cars

 

[Polishprince]

Nonsense

You can stop right there. You are 100% wrong. The statistics show what they show. And, when determining risk over a large risk pool, nobody cares what Hutch Starskey had for breakfast or what his character is. These are mathematical algorithms.

The numbers show that credit profile correlates very well(as mentioned twice in this thread, as well as or more well than any other data point) with risk of filed claims and adverse action. This isn't an ethical or moral stance, its simply an algorithm.

You would be correct to call it "mindless" or "amoral" or even "unfair", in some cases. But you would not be correct to claim this stark, clear correlation does not exist. Again, there is no mind paid to moral principles or causation, here. It's simply correlation and mathematics.

Age, marital status and Zip Code are also used by auto insurers to determine premiums. I guess that a 62 year old married woman in Coudersport PA might be a worse driver than a 19 year old single guy in Cleveland Ohio, but all things being equal, she's still considered less of a risk at least until she has an accident or two.

 

[Polishprince]

Tlaib bill would prohibit use of credit scores to set car insurance rates

She’s almost as bad as AOC and Omar

I am with her on this, You could have 5 D.U.I.s , 8 car crashes and have cheaper car insurance then someone with a perfect driving record, with a bad credit score.

Says someone with either a bad driving record or lousy credit score!

I have a perfect driving record the past 34 years fuck face AND A GOOD CREDIT SCORE, ONCE AGAIN ASSHOLE WHAT DOES CREDIT SCORE HAVE TO DO WITH DRIVING A CAR?


You must be a car insurance sales man, it was a fucking scam, for poor people to subsidize crappy ass rich drivers, just like its a scam for poor people to subsidize rich people and their Electric cars

It doesn't have anything to do with driving a car, but it does have a lot to do with the chance of an automobile insurance claim.

 

[Fort Fun Indiana]

What I have mentioned a couple times is the idea of "adverse action". While insuramce companies also have to juggle risk of claims, they also have to combat the idea of "adverse action". This is the idea that people both buy insurance for the "wrong" reasons and misrepresent themselves when purchasing it.

One example is a person who buys extensive medical coverage on his auto insurance. He then gets in an accident and falsely attributes an existing injury/condition to the accident.

Another example would be someone who is tired of their car payment, and so "forgets" to set the parking brake while parked on a downhill near a lake.

These sort of adverse actions also correlate well with credit profile. It just is what it is.

 

[Fort Fun Indiana]

Age, marital status and Zip Code are also used by auto insurers to determine premiums.

Yes, absolutely. As is the distance you live from work or school.

 

[Remodeling Maidiac]

Tlaib bill would prohibit use of credit scores to set car insurance rates

She’s almost as bad as AOC and Omar

I am with her on this, You could have 5 D.U.I.s , 8 car crashes and have cheaper car insurance then someone with a perfect driving record, with a bad credit score.

Says someone with either a bad driving record or lousy credit score!

I have a perfect driving record the past 34 years fuck face AND A GOOD CREDIT SCORE, ONCE AGAIN ASSHOLE WHAT DOES CREDIT SCORE HAVE TO DO WITH DRIVING A CAR?


You must be a car insurance sales man, it was a fucking scam, for poor people to subsidize crappy ass rich drivers, just like its a scam for poor people to subsidize rich people and their Electric cars

It doesn't have anything to do with driving a car, but it does have a lot to do with the chance of an automobile insurance claim.

You contradicted yourself

 

[Hutch Starskey]

Nonsense

You can stop right there. You are 100% wrong. The statistics show what they show. And, when determining risk over a large risk pool, nobody cares what Hutch Starskey had for breakfast or what his character is. These are mathematical algorithms.

The numbers show that credit profile correlates very well(as mentioned twice in this thread, as well as or more well than any other data point) with risk of filed claims and adverse action. This isn't an ethical or moral stance, its simply an algorithm.

You would be correct to call it "mindless" or "amoral" or even "unfair", in some cases. But you would not be correct to claim this stark, clear correlation does not exist.

LOL...
Nonsense.
Any future claim made by me as a result of an act of god is not predictable by my credit score. Every person in the storm zone with an exposed vehicle was affected regardless of score.

At 50 and never having filed a claim, I'm no less at risk of needing to do so now then when I was younger and had worse credit. If my car were significantly damaged in a weather event, I would file a claim. Just as anyone would, regardless of their credit score.

 

[Fort Fun Indiana]

LOL...
Nonsense.

Unfortunately, these things are well studied and are proven models. Actuarial science is a rigorous practice performed by highly educated amd trained people, and insurance companies are 100% reliant on it. So the opinion of someone who knows less than nothing about it is just not compelling. Nothing personal.