Insurers Overturn Fla. Restriction on Use of Credit Scoring
Southeast News • January 4, 2007
A Florida Administrative Law Judge has declared that the Florida Office of Insurance Regulation's rule restricting the use of credit information by insurers is invalid.
In a Dec. 29 ruling, Judge ...
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Subject: Whats the point
Posted On: January 4, 2007, 4:29 pm CST
Posted By: JR
Comment:
Does anyone really expect us to believe that insurance companies have an agenda to keep low income people poor? What is the incentive to give rich people lower rates?
Folks the history of this credit crap does not lie. there is a clear corrilation in claims frequency and severity based on the credit score. And yes a low income person is clearly more likely to file a low dollar claim because they simply do not have the money to make small repairs, so should we give them the same rate but a higher deductible just to keep the claims down? I do believe however than SOME companies have not handled credit scoring responsibly and most of this can be blamed on the 3 or 4 credit bureaus and the hap hazard way they seem to handle things. They frequently screw up credit history and this could cost someone additional money on insurance. Now lets also make it clear that bad credit does not cost you more on insurance, rather good credit will get you a discount, at least that is the way filings are to be done in Florida. The problem with the rich versus poor argument is that rich people drive newer more expensive cars and they also have 10-25 times the insurance limits, which means in the event of an accident or loss that the company is on the hook for 10-25 times money than if the poor person had a claim.
Other than medical reasons or a nasty divorce there are few other excuses for poor credit other than lack of personal responsiblity to charge only what you can afford to pay back and to pay in a timely manner. What basis is there for insurance companies to keep poor people poor? none, but SOME MAY be a higher risk to the company.
Subject: Whats the point
Folks the history of this credit crap does not lie. there is a clear corrilation in claims frequency and severity based on the credit score. And yes a low income person is clearly more likely to file a low dollar claim because they simply do not have the money to make small repairs, so should we give them the same rate but a higher deductible just to keep the claims down? I do believe however than SOME companies have not handled credit scoring responsibly and most of this can be blamed on the 3 or 4 credit bureaus and the hap hazard way they seem to handle things. They frequently screw up credit history and this could cost someone additional money on insurance. Now lets also make it clear that bad credit does not cost you more on insurance, rather good credit will get you a discount, at least that is the way filings are to be done in Florida. The problem with the rich versus poor argument is that rich people drive newer more expensive cars and they also have 10-25 times the insurance limits, which means in the event of an accident or loss that the company is on the hook for 10-25 times money than if the poor person had a claim.
Other than medical reasons or a nasty divorce there are few other excuses for poor credit other than lack of personal responsiblity to charge only what you can afford to pay back and to pay in a timely manner. What basis is there for insurance companies to keep poor people poor? none, but SOME MAY be a higher risk to the company.