Posted On: June 11, 2007, 12:02 pm CDT

Posted By: Kent Underwood

I've been an agent for over 28 years. I have had 3 customers convicted of arson (burning their own house down), 2 customers convicted of having their car stolen, 2 convicted of insurance fraud staging accidents and lots of suspicious claims in which fraud was suspected. In each and every one of these it was the insured's bad credit score which alerted claims investigators to take a closer look. These customers' credit had deteriorated to the point that they might do something illegal to use their insurance policy to make some money. This is one of the key factors in why insurance companies use credit.
My customers with the best credit usually better maintain their property- homes, autos, boats, etc..
It was so much simplier to write insurance before credit scoring but, it works. Most of my customers pay lower rates thanks to credit scoring.
I do think that credit scoring can be allowed only with adequate disclosure to the customer.
KU