Seems to me that the insurance companies have a good point. If the FTC did this same type of review of auto insurance policies, why then do homeowners insurance? Sounds like Congress is trying to make some paper tigers at the expense of insurance company, and more so, at the expense of our personal information.
Since Insurance companies do not have anything in their systems regarding race/ethnicity of their insureds, how will this benefit their efforts to create a confition that doesn’t exist.
This is a smoke screen on the part of the Federal Gov’t by going on record that the Fed is looking out for the consumer and the big bad insurance companies are not. A political football. During this financial bailout the Fed attempted something similar in advocating a much larger Federal oversight agency to watch Insurance companies’ financial dealings. The states are doing just fine. AIG’s insurance entities are relatively sound only because of state regulation and not federal regulation.
The previous FTC study was total baloney.
The only info they looked at was the hand-picked tidbits the insurance companies gave them. Sooner or later everyone will figure out that credit scoring is nothing more than HIGH TECH REDLINING.
Isn’t it interesting, so many of the conspiracy theorists cloak their identity in high-sounding names like “The Truth”. A label doesn’t make you right – far from it, it tends to lend discredit to your cause.
Hey “Truth”, spoken like someone who’s never sold an insurance policy or worked with the public. I guess we should ban all underwriting criteria and charge everyone the same rate? Now that’s fair. I’ve always thought it’s a shame that boys pay more than girls or singles pay than married couples. Don’t you, Truth?
Why don’t you grow up and learn a little about the industry you are commenting on rather than making movie references? The nuts have been after the IJ site recently for sure. It sounds like a bunch of 12 year olds making comments.
I have been a licensed agent for 30 years and it is discrimination and redlining which are both illegal. Furthermore, I am personal proof. Due to an irresponsible exhusband and my divorce my credit score is in the toilet and I should have to pay higher rates than others because of it???? Are you nuts? My only possession is my car. It is my livelyhood and just because my credit score is low doesn’t mean I’m going to set it on fire to collect the depreciated value and it doesn’t mean I should have to pay more. And for further clarification I am a single white female 49 years old.
Im not sure what the movie flawless has to do with this discussion.
Flawless
(1999) R
Homophobe Walt Koontz (Robert De Niro) suffers a debilitating stroke and must take theraputic singing lessons (for his paralyzed larynx). But the guy doling out the lessons happens to be his next-door neighbor, Rusty Zimmerman (Philip Seymour Hoffman) — a florid drag queen who despises bigoted straight people. With luck, maybe the two men will meet in the middle.
So, for all those years prior to credit scoring (a product/idea pushed by the credit collection agencies), you company-side Kool Aid drinkers are saying that the auto and homeowners insurance industry was not able to make an underwriting profit based on driving records/type of auto/type and age of construction/loss experience/policy histories?
It’s not that credit scoring isn’t a correct predictor of loss some of the time; it’s that it is simply the wrong estimator of risk to be using in this day and time. Far too many folks who are moral, upstanding clients are being undeservedly penalized because of an arbitrary, credit scoring formula.
Credit scores are further damaged by the current banking practice of raising credit card interest rates, in spite of timeliness of payment, which lead to greater financial stress and slower pay accounts, which result in lower credit scores and even higher interest rates.
Why do you ask questions that poison the debate? There is no place on any insurance company application for race. Poor insurance scores come in all colors. The purpose of an insurance company is to write profitable business. People with poor insurance scores have more claims. People with poor insurance scores, regardles of their unknown race, should pay a higher premium because of that likelihood. Why is this so hard for you to understand? Some of you are professional anti-insurance posters, but many of you just won’t take the time to understand the mechanism of insurance. Educate yourselves other than on the anti-insurance web sites.
Sorry, but it doesn’t sound like you’ve been an agent for 30 years. If so you would know that insurance companies set rates, in part, for groups (or subsets)of people based on specific, common criteria within the group. That’s why someone with two speeding tickets pays more than those that don’t have tickets even though that particular individual with two tickets hasn’t cost the company one dime on an auto claim. Or that’s why teen drivers pay more even though some are fortunate enough to make it through the teen years without an accident (rare I know). So now you’re credit stinks and now you’re in the bad group. I do empathize wth you. Maybe credit works best with the extremes (really great credit – definition – someone who cares VS really bad credit – definition – someone who lives their life in a constant mess). I believe there is a statistical difference and there is data that supports it.
Seems to me that the insurance companies have a good point. If the FTC did this same type of review of auto insurance policies, why then do homeowners insurance? Sounds like Congress is trying to make some paper tigers at the expense of insurance company, and more so, at the expense of our personal information.
Since Insurance companies do not have anything in their systems regarding race/ethnicity of their insureds, how will this benefit their efforts to create a confition that doesn’t exist.
This is a smoke screen on the part of the Federal Gov’t by going on record that the Fed is looking out for the consumer and the big bad insurance companies are not. A political football. During this financial bailout the Fed attempted something similar in advocating a much larger Federal oversight agency to watch Insurance companies’ financial dealings. The states are doing just fine. AIG’s insurance entities are relatively sound only because of state regulation and not federal regulation.
The previous FTC study was total baloney.
The only info they looked at was the hand-picked tidbits the insurance companies gave them. Sooner or later everyone will figure out that credit scoring is nothing more than HIGH TECH REDLINING.
And all the other studies that disagree with your opinion are baloney too I suppose? Typical.
Isn’t it interesting, so many of the conspiracy theorists cloak their identity in high-sounding names like “The Truth”. A label doesn’t make you right – far from it, it tends to lend discredit to your cause.
The Truth speaks it. His insight and pithiness of expression are to be admired.
You others appear human but act like robots under corporate control, furthering the devastation of the planet.
Advice from Klaatu and I: Learn to think for yourself. It may upset you but for those with sufficiently strong minds, you will be better off.
Gort (not activated at the moment)
Hey “Truth”, spoken like someone who’s never sold an insurance policy or worked with the public. I guess we should ban all underwriting criteria and charge everyone the same rate? Now that’s fair. I’ve always thought it’s a shame that boys pay more than girls or singles pay than married couples. Don’t you, Truth?
GO see the movie FLAWLESS. Might makeyou wake up or maybe the movie seven pounds
Why don’t you grow up and learn a little about the industry you are commenting on rather than making movie references? The nuts have been after the IJ site recently for sure. It sounds like a bunch of 12 year olds making comments.
I have been a licensed agent for 30 years and it is discrimination and redlining which are both illegal. Furthermore, I am personal proof. Due to an irresponsible exhusband and my divorce my credit score is in the toilet and I should have to pay higher rates than others because of it???? Are you nuts? My only possession is my car. It is my livelyhood and just because my credit score is low doesn’t mean I’m going to set it on fire to collect the depreciated value and it doesn’t mean I should have to pay more. And for further clarification I am a single white female 49 years old.
Im not sure what the movie flawless has to do with this discussion.
Flawless
(1999) R
Homophobe Walt Koontz (Robert De Niro) suffers a debilitating stroke and must take theraputic singing lessons (for his paralyzed larynx). But the guy doling out the lessons happens to be his next-door neighbor, Rusty Zimmerman (Philip Seymour Hoffman) — a florid drag queen who despises bigoted straight people. With luck, maybe the two men will meet in the middle.
Right on, right on, right on, sister!
So, for all those years prior to credit scoring (a product/idea pushed by the credit collection agencies), you company-side Kool Aid drinkers are saying that the auto and homeowners insurance industry was not able to make an underwriting profit based on driving records/type of auto/type and age of construction/loss experience/policy histories?
It’s not that credit scoring isn’t a correct predictor of loss some of the time; it’s that it is simply the wrong estimator of risk to be using in this day and time. Far too many folks who are moral, upstanding clients are being undeservedly penalized because of an arbitrary, credit scoring formula.
Credit scores are further damaged by the current banking practice of raising credit card interest rates, in spite of timeliness of payment, which lead to greater financial stress and slower pay accounts, which result in lower credit scores and even higher interest rates.
Put the tool down and step away from the policy.
What if I told you income was a factor as well?
So rich people should pay less for insurance? How much less?
What if I told you having white skin was a determining factor in how many claims one might have?
Should we use it?
Where do we draw the line?
Why do you ask questions that poison the debate? There is no place on any insurance company application for race. Poor insurance scores come in all colors. The purpose of an insurance company is to write profitable business. People with poor insurance scores have more claims. People with poor insurance scores, regardles of their unknown race, should pay a higher premium because of that likelihood. Why is this so hard for you to understand? Some of you are professional anti-insurance posters, but many of you just won’t take the time to understand the mechanism of insurance. Educate yourselves other than on the anti-insurance web sites.
For all of you that are interested in this debate:
MyNewMarkets.com ran a five-part series on the issue of credit scoring a few months ago.
Here is the link to the first article: http://www.mynewmarkets.com/article_view.php?id=93841
This presents the academic side with a rebuttal. Enjoy.
Sorry, but it doesn’t sound like you’ve been an agent for 30 years. If so you would know that insurance companies set rates, in part, for groups (or subsets)of people based on specific, common criteria within the group. That’s why someone with two speeding tickets pays more than those that don’t have tickets even though that particular individual with two tickets hasn’t cost the company one dime on an auto claim. Or that’s why teen drivers pay more even though some are fortunate enough to make it through the teen years without an accident (rare I know). So now you’re credit stinks and now you’re in the bad group. I do empathize wth you. Maybe credit works best with the extremes (really great credit – definition – someone who cares VS really bad credit – definition – someone who lives their life in a constant mess). I believe there is a statistical difference and there is data that supports it.
And I believe there are still companies that don’t choose to use this method. Find one and use it.