This correlation proves that lower premiums paid by higher insurance score individuals creates loyalty and less need to shop. It also substantiates that higher income level clients tend to worry less about everyday expenses like insurance. Good article!
One thing to consider, is that younger drivers do have higher auto insurance premiums, so there is higher percentage of premium savings and the younger dirver has not yet developed loyalty to an agent or company.
I have never had a low credit score, but I shop around because insurance companies do NOT care if you have been with them for 1 year or 10 years! They raise their rates even if you have NEVER had a claim! They ALWAYS have an excuse for doing so! God forbid you do have a claim, you better pray you have a big bank account or pray they don’t drop you. LOYALTY means NOTHING to insurance companies!
You obviously don’t understand the basic tenant of insurance to spread the risk. You probably are in the most competitive rating tier, but still buy on price rather than value.
I owned auto ins. agency in 3 states total of 13 offices, credit rateing does not have any bearing on if you are a good driver or not. It is a way for the auto ins. co’s to increase the rates. This is also very profitable for the company’s that are providing the credit info. What is needed is an elected insurance commissioner. One that rep’s the consumer not the companies.
In this case the Elected Ins. Comm. rep. the voters, not the companies. In California it an elected position. The rates are lot LESS using the same demographics. At one time I owned 4 auto insurance offices,was an INDEPENDENT, MEMBER of the PIA and Auto Ins. Assoc. out of Southern CA. I am comparing NV. against CA.
The reason insurance companies use credit scores is because it has shown to have the highest correlation to claims filed and paid losses. That does not necessarily mean people with lower credit scores are bad drivers, but they do file more claims. If using credit scores in rating did not work, why does nearly every insurance company use them when they can?
How will you explain all of the rate increases to your clients with higher credit scores who will lose their discount? Most studies I have seen indicate over 40% of policyholders receive a discount while less than 15% receive a surcharge for credit scores. Do you want lower risk drivers to further subsidize higher risk drivers?
This just in: customers who pay more for insurance shop more because the potential cost savings for doing so is substantial. Customers who pay less, shop less, because the potential cost savings is minimal.
This correlation proves that lower premiums paid by higher insurance score individuals creates loyalty and less need to shop. It also substantiates that higher income level clients tend to worry less about everyday expenses like insurance. Good article!
One thing to consider, is that younger drivers do have higher auto insurance premiums, so there is higher percentage of premium savings and the younger dirver has not yet developed loyalty to an agent or company.
I have never had a low credit score, but I shop around because insurance companies do NOT care if you have been with them for 1 year or 10 years! They raise their rates even if you have NEVER had a claim! They ALWAYS have an excuse for doing so! God forbid you do have a claim, you better pray you have a big bank account or pray they don’t drop you. LOYALTY means NOTHING to insurance companies!
You obviously don’t understand the basic tenant of insurance to spread the risk. You probably are in the most competitive rating tier, but still buy on price rather than value.
Who said your rates are supposed to go down? That little voice inside your head?
I owned auto ins. agency in 3 states total of 13 offices, credit rateing does not have any bearing on if you are a good driver or not. It is a way for the auto ins. co’s to increase the rates. This is also very profitable for the company’s that are providing the credit info. What is needed is an elected insurance commissioner. One that rep’s the consumer not the companies.
Yeah, that’s right, because elected officials always do what’s best for the consumers or voting public! …eh hmmm…
In this case the Elected Ins. Comm. rep. the voters, not the companies. In California it an elected position. The rates are lot LESS using the same demographics. At one time I owned 4 auto insurance offices,was an INDEPENDENT, MEMBER of the PIA and Auto Ins. Assoc. out of Southern CA. I am comparing NV. against CA.
Thomas Murphy,
The reason insurance companies use credit scores is because it has shown to have the highest correlation to claims filed and paid losses. That does not necessarily mean people with lower credit scores are bad drivers, but they do file more claims. If using credit scores in rating did not work, why does nearly every insurance company use them when they can?
How will you explain all of the rate increases to your clients with higher credit scores who will lose their discount? Most studies I have seen indicate over 40% of policyholders receive a discount while less than 15% receive a surcharge for credit scores. Do you want lower risk drivers to further subsidize higher risk drivers?
http://www.insurancequotes.com/insurance-tips/credit-based-insurance-score
This just in: customers who pay more for insurance shop more because the potential cost savings for doing so is substantial. Customers who pay less, shop less, because the potential cost savings is minimal.
Thanks for the insight!