Posted On: October 3, 2006, 5:11 pm CDT

Posted By: Jacqueline

What about carriers rating people adversely because their poor credit weighs more than their excellent claims record? This practice is based on the assumption that the poor are desperate to get money, so they see insurance as a safety net as they are (supposedly) more prone to file a claim to seek compensation for a loss than the middle-class to upper class higher-income earners.

Carriers tend to cut the well-off alot of slack because they think they have a "high lifetime value" as potential customers for buying annuities and insuring luxuries such as motor homes and boats so the guy with a DUI or two and maybe a few minor accidents will get cut a break. Also the higher income people with the perfect credit (aka "the 700 Club - FICO scores above 700) are deemed by caompanies to be less prone to filing a claim on which to be compensated because they can afford to absorb the loss themselves, and thus can afford to be more claims conscious than the poor who have no money or safety net.

What this means is that a working poor middle-aged driver w/ an excellent driving record pays more than the affluent driver with tickets, accidents and a DUI or two. With over 28% of the population living paycheck to paycheck, how much effect do you think this has on families - on entire communities? 37 million Americans live at or below poverty. Being able to afford a car is the link between being able to get to where the jobs are versus not being able to get and keep a job. And a major part of being able to afford a car is being able to afford the auto insurance required. What do you think about that?