The Impact of Credit-Based Insurance Scoring on the Availability and Affordability of Insurance - Part I
National News • September 24, 2008
Following is the testimony presented by Lawrence S. Powell, PhD before the United States House of Representatives Financial Services Committee Oversight & Investigations Subcommittee on May 21, ...
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Subject: Re: The Impact of Credit-Based Insurance Scoring on the Avai
Posted On: September 25, 2008, 7:48 pm CDT
Posted By: George C Sigalas, CIC, CPCU
Comment:
Credit scores are not a fair criterior for insurance rates. I have seen a credit score drop from the 710 to the low 600's in less than a year caused by a son having a 30 day late on a home his parents were helping him to purchase, the parents taking advantage of additional new credit card offers and shopping for the best rate when purchasing a new car.. In this case the parents had not been late on any payments nor did they file any insurance claims in well over 5 years. Certainly, in this case, the drop in their credit score has no bearing on the propensity for auto insurance claims. Using such a criterior enables another income stream for "Free Credit Report dot com." I believe annual mileage (that is currently availability to insurance companies online) along with zip code, vehicle statistics and driving records to be much more relative to predicting loss costs than credit scores..
Subject: Re: The Impact of Credit-Based Insurance Scoring on the Avai