Gentlemen,
Please allow me to first state, that I work in an industry that is directly related to the insurance industry. I live in a state (Indiana) which allows this discriminatory practice to occurr, in fact, due to circumstances beyond my personal control, I have become a ‘statistic’ of Credit Scoring. For the record, I find it cavalear to arbitrarily equate a poor credit score to increased likelyhood of claims being submitted. I’ve been a home owner now for almost 5 years, and in that time have not even been close to submitting a claim. I believe a more accurate means of determining premium rates would be to evaluate the structure being insured, the neighborhood the structure is located in, etc. I am personally appalled that the industry I work in has taken what I believe to be a blatant step to once again put the burden of their profits upon the backs of the average and honest hardworking citizen.
In response to wt1155 I have a few comments/questions that should be addressed when considering the use of credit and other factors. You state that credit is a “discriminatory” factor and you would prefer that carriers assess the structure, the neighborhood, etc… Aren’t thess factors also somewhat discriminatory in nature? According to you the industry should be free to redline poor neighborhoods. The industry can also decline to insure an older building or a building in poor condition which is more likely to occur in poor neighborhoods than in more affluent sections of town. It would appear that you approve of discriminating against the poor, just not those with credit problems.
You seem concerned that the insdustry has “put the burden of profits upon the backs of average and honest hardworking citizens”; doesn’t the industry put the burden of profit on their clients? I would think that a quality actuary working for a carrier would evaluate the number of homes that need to be insured at $200 – $400 per year to pay for the occassional total loss that will cost the carrier hundreds of thousands of dollars. Quality underwriting using all of the available tools, crecit scoring included, are needed to ensure the profitabilty of an insurance carrier. The last time I looked insurance carriers were for profit ventures. If you do not like this arrangement perhaps you can start your own carrier which would probably qualify as a “non-profit”. Alan.
– Well written article correctly presenting the unfair impact on segments of society by an ever more economically driven non-responsible industry.
– The use of credit scoring is unacceptable, based on the error factors associated with the Fair Isac Scoring and since that is always on the negative side of the ledger, it becomes an excuse for a higher rate modifier or no insurance.
– Decisions based on superficial univariate credit score is unacceptable and a cover for the industry that no longer want the cost of using real underwriting criteria. Carriers and agents with the decades of downsizing mentality are looking for the economic shortcut to substitute for real underwriting, all while denying this is the current reality.
– The “HAVES” representing the elite and the insurance industry “THE HAVE NOTS” with less financial power have attempted to devise a way to surcharge the majority of society for insurence, all while misrepresenting to the contrary and ironically all of those haughty superior supporters, fall into the old trap of class conflict and ultimately become victims of the higher pricing also. It is truly ironic! “Liars can figure, and figures can lie!”
– Simply put, the gross mismanagement by financial senior managers at insurance carriers for the past two decades has laid the groundwork for the cheap cost cutting shortcut that will produce more premium at less cost without authority for a rate increase.
– Once the financial windfall occurred, there would be years of stone walling and well financed disinformation processes engaged, with the flawed process continuing to become more entrenched.
– The consumer oriented insurance departments of the past are the exception rather than the rule and more often than not, these state governmental agencies give the appearance of advocacy and lip service only to the consumer.
– I have been in the P&C industry for 35 years and am distressed to see what has happened … another part of the reason the industry wants this easy criteria for underwriting is that the industry has abandoned the process of training underwriters and having done so for more than 20 years (the onset of down sizing), so now there are very few left that have underwriting skills to do a core job essential to the financial health of an industry.
– The above is the hidden agenda of the current financial short-cut driven insurance industry.
– Keep up the pressure … ironically you will be saving the elitist from themselves as well.
Gentlemen,
Please allow me to first state, that I work in an industry that is directly related to the insurance industry. I live in a state (Indiana) which allows this discriminatory practice to occurr, in fact, due to circumstances beyond my personal control, I have become a ‘statistic’ of Credit Scoring. For the record, I find it cavalear to arbitrarily equate a poor credit score to increased likelyhood of claims being submitted. I’ve been a home owner now for almost 5 years, and in that time have not even been close to submitting a claim. I believe a more accurate means of determining premium rates would be to evaluate the structure being insured, the neighborhood the structure is located in, etc. I am personally appalled that the industry I work in has taken what I believe to be a blatant step to once again put the burden of their profits upon the backs of the average and honest hardworking citizen.
In response to wt1155 I have a few comments/questions that should be addressed when considering the use of credit and other factors. You state that credit is a “discriminatory” factor and you would prefer that carriers assess the structure, the neighborhood, etc… Aren’t thess factors also somewhat discriminatory in nature? According to you the industry should be free to redline poor neighborhoods. The industry can also decline to insure an older building or a building in poor condition which is more likely to occur in poor neighborhoods than in more affluent sections of town. It would appear that you approve of discriminating against the poor, just not those with credit problems.
You seem concerned that the insdustry has “put the burden of profits upon the backs of average and honest hardworking citizens”; doesn’t the industry put the burden of profit on their clients? I would think that a quality actuary working for a carrier would evaluate the number of homes that need to be insured at $200 – $400 per year to pay for the occassional total loss that will cost the carrier hundreds of thousands of dollars. Quality underwriting using all of the available tools, crecit scoring included, are needed to ensure the profitabilty of an insurance carrier. The last time I looked insurance carriers were for profit ventures. If you do not like this arrangement perhaps you can start your own carrier which would probably qualify as a “non-profit”. Alan.
– Well written article correctly presenting the unfair impact on segments of society by an ever more economically driven non-responsible industry.
– The use of credit scoring is unacceptable, based on the error factors associated with the Fair Isac Scoring and since that is always on the negative side of the ledger, it becomes an excuse for a higher rate modifier or no insurance.
– Decisions based on superficial univariate credit score is unacceptable and a cover for the industry that no longer want the cost of using real underwriting criteria. Carriers and agents with the decades of downsizing mentality are looking for the economic shortcut to substitute for real underwriting, all while denying this is the current reality.
– The “HAVES” representing the elite and the insurance industry “THE HAVE NOTS” with less financial power have attempted to devise a way to surcharge the majority of society for insurence, all while misrepresenting to the contrary and ironically all of those haughty superior supporters, fall into the old trap of class conflict and ultimately become victims of the higher pricing also. It is truly ironic! “Liars can figure, and figures can lie!”
– Simply put, the gross mismanagement by financial senior managers at insurance carriers for the past two decades has laid the groundwork for the cheap cost cutting shortcut that will produce more premium at less cost without authority for a rate increase.
– Once the financial windfall occurred, there would be years of stone walling and well financed disinformation processes engaged, with the flawed process continuing to become more entrenched.
– The consumer oriented insurance departments of the past are the exception rather than the rule and more often than not, these state governmental agencies give the appearance of advocacy and lip service only to the consumer.
– I have been in the P&C industry for 35 years and am distressed to see what has happened … another part of the reason the industry wants this easy criteria for underwriting is that the industry has abandoned the process of training underwriters and having done so for more than 20 years (the onset of down sizing), so now there are very few left that have underwriting skills to do a core job essential to the financial health of an industry.
– The above is the hidden agenda of the current financial short-cut driven insurance industry.
– Keep up the pressure … ironically you will be saving the elitist from themselves as well.