Posted On: May 29, 2008, 1:15 am CDT

Posted By: frustrated

Credit based scoring was initiated for one reason only, to increase insurance revenues by charging increased premiums on people who have no accident history. Although credit scoring may be predictive of possible future accidents, the fact is most of the people given these increased premiums have a clean record. The insurance companies believe that all of the premiums collected belong to them and they don't want to be penalized by paying claims. Credit scoring is just another method to collect premiums that the insurance companies are not entitled to and they use it to offset claims that are actuarially included in non credit scored premiums. Is insurance scoring predictive?, yes it is. Does that make it right?
What will you say when they start using DNA to set health insurance premiums. Only the people who are directly affected will complain. The rest will say too bad it's a good predictor of futur claims.
I can think of dozens of things that they could use as valid predictors that would probably be very objectionable to different people depending on how they are affected by these predictors.
As far as insurance vs banking, the state doesn't force an individual to bank, but insurance is mandatory in all states. Therefore, the cost must be reasonable and affordable for both rich and poor.
Be careful what you embrace in the dark, because you may just wakeup with an unwanted guest in your house.