Let\’s turn the clock back to the 1960\’s, when insurers underwrote \”for the same reason they use any other piece of demographic information\”, such as neighborhood, ancestry, etc. This is the same story as credit scoring for insurance. Fancy substitutes for illegal, old time discrimination
Ratemaking is discriminatory; only unfair discrimination is prohibited. If insurers show a correlation of their rating factors, prohibiting their use just leads to cost shifting and subsidization. This restricts competition and is bad for consumers. Didn\’t NJ learn their lesson?
The Texas Department of Insurance (no particular friend to the industry) commissioned an independent study of credit scoring and found – surprise – that use of credit was objective, predictive and not discriminatory. The same has been found by a number of other independent studies.
So who is the racist – an insurer that collects credit scores, education and occupation information that indicate an actuarially sound basis for use of this information – or the critics who ASSUME that minorities have poor credit, poor jobs and no education?
Why is their only punishment for doing things the right way these days? For example, go to college, work hard get married first and then have kids, work to support those same kids, etc… and all you get is that your a bad, bad whitey who needs to be taxed to death because you stepped on the poor, poor innocent minority who would do well if only for you, BAD CRACKER! Do things the WRONG way, drop out of school, bear children out of wedlock, do or deal drugs, don\’t work or bother to advance yourself, and it\’s a free for all for entitlements that those of us who are doing right are being \”punished\” for and made to pay.
What a brilliant deduction: if you pay more for auto insurance than a professor at Rutgers because you dropped out of 9th grade to wash dishes for a living, it\’s RACISM!!! RACISM RACISM RACISM!!!!!!!!!
Hey Reagan, why do you assume the drug dealer or unemplyed and uneducated would pay more. They only said they want to base their rates on education and job, maybe an unemplyed uneducated will receive a lower rate?
Thats waht I would do, social justice, they need a break becasue they probably make less money. Im sure thats what most insurance companies have in mind.
I have to line up against using generalities in underwriting. I understand why a big company like Geico would want to. It is simple; you draw a little box around some generalities, and then anyone with a high school diploma can see if the underwriting fits in the box. I don\’t give one wit about discrimination, I just think it is bad underwriting. Look at clients as individuals, look at their track record, their loss history. Keep the generalities to a minimum.
Lizard Face said: \”Geico owns there politicians as well. In fact they just hired the former NJ insurance commisioner last year. This smells bad.\”
NJ Cure, which boasts that it is a non-profit company (it\’s a reciprocal exchange), is advertising on the radio as if it\’s \”exposing\” GEICO\’s practice of careful, innovative underwriting like it\’s a crime. WHO MANAGES NJ CURE?
It was founded by former New Jersey Insurance Commissioner James J. Sheeran. http://www.njcure.com/faq3.shtml
Quite right… a person\’s credit score says nothing about their race, religion, national origin, sexual orientation. Technically speaking it doesn\’t even say much about income level. Credit is responsibility. Being responsible enough to manage finances and debt and to pay on that debt in a timely manner. If a person can\’t be responsible enough for that it often manifests in other aspects of their lives (as proven by multiple studies). Additionally, a person who can\’t pay bills won\’t pay insurance invoices and are more likely to cancel early before a company is able to make profit to offset initial costs of writing a new business policy.
GEICO uses education and occupation in every state where allowed and has since their beginnings in 1936. What\’s interesting is that Maryland passed a law to specifically allow this practice. Previously, the Maryland Commissioner of Insurance issued a letter (at the request of GEICO) to all fellow commissioners advising them that as GEICO\’s home state commissioner, they have reviewed their practice and found it to be sound. Understand that it\’s in the best interest of the State of Maryland that GEICO continues to grow. Big business influencing Government officials has been around since the Caveman.
What an ignorant statment Mr Reagan!!!! Not all black people deal drugs, have babies out of wedlock and are not educated. Just because a person doesn\’t have a college degree or is poor doesn\’t necessarily make them bad risks nor does being the opposite make for a good risk. When we replace underwriters who can underwrite \”individuals\” for computer based/slot underwriter those in the minority will always suffer.
First, to address the statement that it is an ASSUMPTION that minorities make up a large portion of the unemployed and uneducated; it is true. Just look at the census data, until you have done that you shouldn\’t make statements about who is making assumptions. Given that, education and occupation are simply proxies for race and income.
Second, to address the comment about the Maryland study…Did you know that when that study was conducted, they didn\’t so much as look at Geico\’s book of business. Now how valid can a study be if the book nor the census data was looked at?
And third, to those who state that using education and occupation is \”actuarially sound\”; well then why is it that when Geico was asked to show the actuarial data supporting the practice, they were unable to provide it.
Bottom line, your job and your degree (or lack thereof) have NO correlation to your driving record. Multi-state, multi-line insurance companies target high income individuals b/c they have more assets that need protecting. Simple as that.
After all that, I leave you with one last thought. To whomever believes that this practice is not discriminatory I ask you to 1)actually look at the US census data 2) research Geico\’s practices; you will find that Geico actually has 4 separate companies and your eligibilty for those companies is dependent on education and occupation alone. They are putting lower income individuals into their sub-standard company which, mind you, has the highest base rates which can be subject to rate increases without affecting their \”preferred company.\”
Using education and occupation is UNETHICAL. That\’s why even though statistical evidence has proven that African-Americans are more prone to certain infections and shorter life spans, race is not allowed as an underwriting factor in life insurance.
Your not reading me right. I\’m assuming that the so called \”underprivleged\” would yet again pay LESS because of course they it\’s racism and bigotry keeping them down instead of their poor choices that are enabled yet again by laws like this. Message that is sent by this is do what you want and we\’ll hit everyone else with a tax increase to pay for it
What a crock. So GEICO is racist? It hates blacks\’ money? It stubbornly uses ineffective criteria for underwriting in spite of their shareholders\’ wishes? Which is it?
In fact, people with higher education degree who pay their bills on time have demonstrated that they are responsible citizens and therefore better risks than dropouts and deadbeats who are charged more – because they are higher risks. Period. If this runs contrary to your view of humanity, than your view of humanity is skewed.
You say that as if you ASSUME that everyone without a degree is a dropout deadbeat. Even the smartest, most responsible man in the world could\’ve had to stop going to school b/c, I don\’t know, he had to take care of his sick mother, or his wife had a baby. Not everyone is uneducated because they are a deadbeat.
Secondly, I\’m not saying that Geico is racist. I\’m saying that using education and occupation as factors to determine car insurance rates is unethical. Geico, as an industry leader, is forcing other companies to adopt this practice. That is why the focus is on Geico. I don\’t agree with ANY company that uses it.
I didn\’t say that everyone w/o a degree is a dropout or deadbeat. I only acknowledge that there are such people, and apparently you do too. Are not dropouts and deadbeats
Question: should white high school dropouts and credit deadbeats pay as much as a black RN with a Masters Degree in nursing who has a credit rating of 760? Shoudl everyone pay the same premiums for life insurance regardless of whether or not they are smokers or base jumpers?
Even if the dropout you describe left school to take care of a sick child, there is every reason to charge him higher rates because QUITING ONE\’S JOB HELPS NO ONE. I can hear it now:
\”Honey, I quit my job so that I can stay home and help you take care of Billy.\”
\”But dear, now we have no health insurance or money.\”
Look Jim, I get what you are saying. Those that have worked hard deserve a break every now and then and people who are deadbeats need to understand they can\’t just sail through life depending on everyone else. I do not disagree with that.
What I am saying is that this should not apply to car insurance. Just cause someone (regardless of race) does not have a degree it does not mean that they will have more accidents. Period. But please, if you have evidence that proves otherwise I would like to see it. Geico has not been able to provide it, so I assume it does not exist. However, I do believe that there is evidence (I stress believe b/c I do not have it) that lawyers, doctors, etc actually have more accidents than other lower paying jobs. I think that you should look at facts instead of going on what you think is true.
Marital status is also a seemingly unrelated criteria for establishing premiums – until you think about it. Married guys, especially with kids, are less prone to doing things like drag racing, or closing bars on weeknights. Hence, lower rates for the henpecked.
Also, in using both education and employment, one might want to learn why the applicant works at Wal-Mart in sporting goods but has a law degree from Harvard. Hmmm… did he get fired from the firm for being drunk on the job? Embezzling?
I know someone who has a degree from Cornell. She recently decided that becoming a doctor was no longer what she wanted to do. Right now she works retail until she can figured out what she would like to do with herself. According to your logic, she should pay more for her car insurance b/c she decided not to be a doctor. It just doesn\’t make sense. You are making a generalization. Everyone has different reasons for why they are in their personal situations. For a company to charge significantly more without looking into those reasons is, I\’ll say it again, UNETHICAL. I noticed you didn\’t address my \”where is your proof\” question. You know as well as I that it does not exist. So yes, I agree, buying insurance is NOT like buying shoes. Everyone should have an equal opportunity to be eligible for the same rates, not placed in a separate company altogether (w/out being told) b/c of their edu/occ status. So are you saying that a man who decides to be a carpenter b/c he enjoys working hands on as opposed to sitting at a desk; then he deserves to pay more for auto insurance? That\’s ridiculous.
A. It\’s legal. Only liberal whiners and NJ Cure, a competitor, are agitating against it.
B. It\’s only one of 20+ criteria, many of which look odd standing alone.
C. Insurance companies are in business to make money. If this criteria indicated nothing, what could possibly be their motive for employing it?
D. Signing off!
A.I know it\’s legal. It is still unethical.
B. It alone will determine which of 4 Geico companies you are eligible for.
C. The motive, as explained before, is that wealthy people have more assets that need protecting therefore are more profitable to multi line insurance companies. (A poor person does not have the luxury of buying life insurance and they probably don\’t own a home)
D. You shouldn\’t sign off as soon as your argument starts to weaken. You were doing well for a while and I enjoyed the debate. But you shouldn\’t give in so easily just b/c your argument has no basis.
I am not signing off because I think I\’m weakening, but because I gave you the bases for my position and you returned opinions rather than facts. So AMF.
My opinions are based on factual information that you can access. You however, have not supplied facts nor factual information. Like I said, if you have facts, I would love to see them.
A. It\’s legal. Only liberal whiners and NJ Cure, a competitor, are agitating against it.
B. It\’s only one of 20+ criteria, many of which look odd standing alone.
C. Insurance companies are in business to make money. If this criteria indicated nothing, what could possibly be their motive for employing it?
D. These are all FACTS.
E. Now STFU.
OK I refuse to repeat myself by again addressing those same points. It is obvious that your limited intelligence is inhibiting your ability to debate this topic. Therefore I will no longer continue to make you look foolish to your colleagues who are reading these comments. I urge you to do some research on this so that you can comment on the big picture; this way next time you debate this you might come up with a stronger argument. As much as I would love to return the STFU comment, immature as it was, I think that it shows weakness more than anything else. So Mr. Jim, Jimbo or whatever–best of luck to you.
Let\’s turn the clock back to the 1960\’s, when insurers underwrote \”for the same reason they use any other piece of demographic information\”, such as neighborhood, ancestry, etc. This is the same story as credit scoring for insurance. Fancy substitutes for illegal, old time discrimination
Who is kidding who!
Ratemaking is discriminatory; only unfair discrimination is prohibited. If insurers show a correlation of their rating factors, prohibiting their use just leads to cost shifting and subsidization. This restricts competition and is bad for consumers. Didn\’t NJ learn their lesson?
The Texas Department of Insurance (no particular friend to the industry) commissioned an independent study of credit scoring and found – surprise – that use of credit was objective, predictive and not discriminatory. The same has been found by a number of other independent studies.
So who is the racist – an insurer that collects credit scores, education and occupation information that indicate an actuarially sound basis for use of this information – or the critics who ASSUME that minorities have poor credit, poor jobs and no education?
VOTE FOR ME!
I\’LL ELIMINATE ALL THINGS IN LIFE I PERCEIVE TO BE UNFAIR. IT\’S BETTER TO HAVE ALL PEOPLE MISERABLE RATHER THAN A FEW.
Hey, you\’re running on the democratic platform too?
Why is their only punishment for doing things the right way these days? For example, go to college, work hard get married first and then have kids, work to support those same kids, etc… and all you get is that your a bad, bad whitey who needs to be taxed to death because you stepped on the poor, poor innocent minority who would do well if only for you, BAD CRACKER! Do things the WRONG way, drop out of school, bear children out of wedlock, do or deal drugs, don\’t work or bother to advance yourself, and it\’s a free for all for entitlements that those of us who are doing right are being \”punished\” for and made to pay.
What a brilliant deduction: if you pay more for auto insurance than a professor at Rutgers because you dropped out of 9th grade to wash dishes for a living, it\’s RACISM!!! RACISM RACISM RACISM!!!!!!!!!
Hey Reagan, why do you assume the drug dealer or unemplyed and uneducated would pay more. They only said they want to base their rates on education and job, maybe an unemplyed uneducated will receive a lower rate?
Thats waht I would do, social justice, they need a break becasue they probably make less money. Im sure thats what most insurance companies have in mind.
Most insurance companies in most states dont use occupation and education for rating purposes, if people know about it many will be enraged.
Geico is one of the only companies in the nation currently using this, and its only in New Jresey.
Geico owns there politicians as well. In fact they just hired the former NJ insurance commisioner last year. This smells bad.
I have to line up against using generalities in underwriting. I understand why a big company like Geico would want to. It is simple; you draw a little box around some generalities, and then anyone with a high school diploma can see if the underwriting fits in the box. I don\’t give one wit about discrimination, I just think it is bad underwriting. Look at clients as individuals, look at their track record, their loss history. Keep the generalities to a minimum.
Lizard Face said: \”Geico owns there politicians as well. In fact they just hired the former NJ insurance commisioner last year. This smells bad.\”
NJ Cure, which boasts that it is a non-profit company (it\’s a reciprocal exchange), is advertising on the radio as if it\’s \”exposing\” GEICO\’s practice of careful, innovative underwriting like it\’s a crime. WHO MANAGES NJ CURE?
It was founded by former New Jersey Insurance Commissioner James J. Sheeran.
http://www.njcure.com/faq3.shtml
Quite right… a person\’s credit score says nothing about their race, religion, national origin, sexual orientation. Technically speaking it doesn\’t even say much about income level. Credit is responsibility. Being responsible enough to manage finances and debt and to pay on that debt in a timely manner. If a person can\’t be responsible enough for that it often manifests in other aspects of their lives (as proven by multiple studies). Additionally, a person who can\’t pay bills won\’t pay insurance invoices and are more likely to cancel early before a company is able to make profit to offset initial costs of writing a new business policy.
GEICO uses education and occupation in every state where allowed and has since their beginnings in 1936. What\’s interesting is that Maryland passed a law to specifically allow this practice. Previously, the Maryland Commissioner of Insurance issued a letter (at the request of GEICO) to all fellow commissioners advising them that as GEICO\’s home state commissioner, they have reviewed their practice and found it to be sound. Understand that it\’s in the best interest of the State of Maryland that GEICO continues to grow. Big business influencing Government officials has been around since the Caveman.
What an ignorant statment Mr Reagan!!!! Not all black people deal drugs, have babies out of wedlock and are not educated. Just because a person doesn\’t have a college degree or is poor doesn\’t necessarily make them bad risks nor does being the opposite make for a good risk. When we replace underwriters who can underwrite \”individuals\” for computer based/slot underwriter those in the minority will always suffer.
I disagree.
First, to address the statement that it is an ASSUMPTION that minorities make up a large portion of the unemployed and uneducated; it is true. Just look at the census data, until you have done that you shouldn\’t make statements about who is making assumptions. Given that, education and occupation are simply proxies for race and income.
Second, to address the comment about the Maryland study…Did you know that when that study was conducted, they didn\’t so much as look at Geico\’s book of business. Now how valid can a study be if the book nor the census data was looked at?
And third, to those who state that using education and occupation is \”actuarially sound\”; well then why is it that when Geico was asked to show the actuarial data supporting the practice, they were unable to provide it.
Bottom line, your job and your degree (or lack thereof) have NO correlation to your driving record. Multi-state, multi-line insurance companies target high income individuals b/c they have more assets that need protecting. Simple as that.
After all that, I leave you with one last thought. To whomever believes that this practice is not discriminatory I ask you to 1)actually look at the US census data 2) research Geico\’s practices; you will find that Geico actually has 4 separate companies and your eligibilty for those companies is dependent on education and occupation alone. They are putting lower income individuals into their sub-standard company which, mind you, has the highest base rates which can be subject to rate increases without affecting their \”preferred company.\”
Using education and occupation is UNETHICAL. That\’s why even though statistical evidence has proven that African-Americans are more prone to certain infections and shorter life spans, race is not allowed as an underwriting factor in life insurance.
Bob,
Your not reading me right. I\’m assuming that the so called \”underprivleged\” would yet again pay LESS because of course they it\’s racism and bigotry keeping them down instead of their poor choices that are enabled yet again by laws like this. Message that is sent by this is do what you want and we\’ll hit everyone else with a tax increase to pay for it
What a crock. So GEICO is racist? It hates blacks\’ money? It stubbornly uses ineffective criteria for underwriting in spite of their shareholders\’ wishes? Which is it?
In fact, people with higher education degree who pay their bills on time have demonstrated that they are responsible citizens and therefore better risks than dropouts and deadbeats who are charged more – because they are higher risks. Period. If this runs contrary to your view of humanity, than your view of humanity is skewed.
You say that as if you ASSUME that everyone without a degree is a dropout deadbeat. Even the smartest, most responsible man in the world could\’ve had to stop going to school b/c, I don\’t know, he had to take care of his sick mother, or his wife had a baby. Not everyone is uneducated because they are a deadbeat.
Secondly, I\’m not saying that Geico is racist. I\’m saying that using education and occupation as factors to determine car insurance rates is unethical. Geico, as an industry leader, is forcing other companies to adopt this practice. That is why the focus is on Geico. I don\’t agree with ANY company that uses it.
I didn\’t say that everyone w/o a degree is a dropout or deadbeat. I only acknowledge that there are such people, and apparently you do too. Are not dropouts and deadbeats
Question: should white high school dropouts and credit deadbeats pay as much as a black RN with a Masters Degree in nursing who has a credit rating of 760? Shoudl everyone pay the same premiums for life insurance regardless of whether or not they are smokers or base jumpers?
Even if the dropout you describe left school to take care of a sick child, there is every reason to charge him higher rates because QUITING ONE\’S JOB HELPS NO ONE. I can hear it now:
\”Honey, I quit my job so that I can stay home and help you take care of Billy.\”
\”But dear, now we have no health insurance or money.\”
Look Jim, I get what you are saying. Those that have worked hard deserve a break every now and then and people who are deadbeats need to understand they can\’t just sail through life depending on everyone else. I do not disagree with that.
What I am saying is that this should not apply to car insurance. Just cause someone (regardless of race) does not have a degree it does not mean that they will have more accidents. Period. But please, if you have evidence that proves otherwise I would like to see it. Geico has not been able to provide it, so I assume it does not exist. However, I do believe that there is evidence (I stress believe b/c I do not have it) that lawyers, doctors, etc actually have more accidents than other lower paying jobs. I think that you should look at facts instead of going on what you think is true.
Marital status is also a seemingly unrelated criteria for establishing premiums – until you think about it. Married guys, especially with kids, are less prone to doing things like drag racing, or closing bars on weeknights. Hence, lower rates for the henpecked.
Also, in using both education and employment, one might want to learn why the applicant works at Wal-Mart in sporting goods but has a law degree from Harvard. Hmmm… did he get fired from the firm for being drunk on the job? Embezzling?
Buying insurance is not like buying shoes, ES.
I know someone who has a degree from Cornell. She recently decided that becoming a doctor was no longer what she wanted to do. Right now she works retail until she can figured out what she would like to do with herself. According to your logic, she should pay more for her car insurance b/c she decided not to be a doctor. It just doesn\’t make sense. You are making a generalization. Everyone has different reasons for why they are in their personal situations. For a company to charge significantly more without looking into those reasons is, I\’ll say it again, UNETHICAL. I noticed you didn\’t address my \”where is your proof\” question. You know as well as I that it does not exist. So yes, I agree, buying insurance is NOT like buying shoes. Everyone should have an equal opportunity to be eligible for the same rates, not placed in a separate company altogether (w/out being told) b/c of their edu/occ status. So are you saying that a man who decides to be a carpenter b/c he enjoys working hands on as opposed to sitting at a desk; then he deserves to pay more for auto insurance? That\’s ridiculous.
A. It\’s legal. Only liberal whiners and NJ Cure, a competitor, are agitating against it.
B. It\’s only one of 20+ criteria, many of which look odd standing alone.
C. Insurance companies are in business to make money. If this criteria indicated nothing, what could possibly be their motive for employing it?
D. Signing off!
A.I know it\’s legal. It is still unethical.
B. It alone will determine which of 4 Geico companies you are eligible for.
C. The motive, as explained before, is that wealthy people have more assets that need protecting therefore are more profitable to multi line insurance companies. (A poor person does not have the luxury of buying life insurance and they probably don\’t own a home)
D. You shouldn\’t sign off as soon as your argument starts to weaken. You were doing well for a while and I enjoyed the debate. But you shouldn\’t give in so easily just b/c your argument has no basis.
I am not signing off because I think I\’m weakening, but because I gave you the bases for my position and you returned opinions rather than facts. So AMF.
My opinions are based on factual information that you can access. You however, have not supplied facts nor factual information. Like I said, if you have facts, I would love to see them.
A. It\’s legal. Only liberal whiners and NJ Cure, a competitor, are agitating against it.
B. It\’s only one of 20+ criteria, many of which look odd standing alone.
C. Insurance companies are in business to make money. If this criteria indicated nothing, what could possibly be their motive for employing it?
D. These are all FACTS.
E. Now STFU.
OK I refuse to repeat myself by again addressing those same points. It is obvious that your limited intelligence is inhibiting your ability to debate this topic. Therefore I will no longer continue to make you look foolish to your colleagues who are reading these comments. I urge you to do some research on this so that you can comment on the big picture; this way next time you debate this you might come up with a stronger argument. As much as I would love to return the STFU comment, immature as it was, I think that it shows weakness more than anything else. So Mr. Jim, Jimbo or whatever–best of luck to you.
And now I am signing off!