Many agents do not like credit scoring because they think it hurts their business. When they do get a client that has a marginal credit score, they end up losing money due to high loss ratios, late payments, short lived policies, and the amount of service work that comes with it. Most would probably make more getting a minimum wage job than work with marginal clients.
Where do you live? Most agents I know welcome credit scoring. Credit scoring can possibly drive a potentially bad risk to try another agency and we almost get the “cherry pick” when the companies come back with a good premium for the good credit risks. And I am here to tell you it has nothing to do with our client’s ecomomic level. We have some blue collar folks with better credit scores than some professionals. It is simply a questions of wise management of the assets you possess.
Spoken like a true home office type !! As an agent in the field, I see clients struggling to raise a family and pay insurance premiums. The Exec in his ivory tower with his company car, expense account, profiability bonus and paid health insurance is only interested in increasing profit more and more, so he gets a bigger bonus !! The agent on the front line is the one paying for office and staff and advertising, only to lose the client to a competitor who has lower rates or does not use credit scoring as an “indicator” of possible future losses. Under credit scoring, an older or retired couple, who own their home and autos outright, would have a LOWER credit score and be charged a higher price, than someone who has a lot of debt. Who do you think is the least likely to have a claim ??
I tend to agree a little bit with both of you. I see many blue collar folks who get a great rate in spite of the fact they don’t live in the “best” part of town. I also have professionals who do live in the better areas paying more. Keep in mind that those saying it’s discriminatory are being somewhat racist themselves by assuming that race truly makes a difference. It doesn’t.
In regards to senior citizens, that is my one area of concern. Once a person sells their home and doesn’t use credit as much, they tend to get a lower score over time which does affect their premium. However, we all know that as people live longer and continue to drive, they need to be paying more since they tend to have more accidents.
No argument that credit has a correlation to claim severity/frequency so the question is; should it be allowed for insurance purposes? Being one who slipped into the quicksand that is low credit but having dug out I can attest that once it happens the odds against climbing out are astronomical. Mine came about from co-signing a loan and was not kept informed by the credit union until it was 120 days past due. One there, you pay more for insurance, autos (you can’t get a loan so you have to buy over-priced pieces of junk from Smiling Rick), credit card rate that rise – even if you’ve never had a late payment, and have to take home loans from loan sharks. But the real kick in the teeth is that more employers are using credit scores so you can’t even get a decent job to earn money to pay back your debt and then you fall deeper in the hole as your credit sinks to new levels. The industry once profitably wrote insurance policies without credit but now that they’ve laid off thousands of underwriters, they can’t afford to lose it as a rating component. Credit is a valid indicator on 70% of the low credit population but for the other 30% who are not making claims (In 40 years of being insured all my claims total less than $10,000) it stinks.
It’s unfortunate the people resort to racism when it comes to credit scoring. People of all races can be responsible credit paying people and people of all races can be irresponsible. The beauty of credit is that is looks at the behavior of one and not race. Martin Luther King did say “people should be judged on the content of their character and not the color of their skin.”
Actually insurexec, show me a sttudy that proves that lower income people dont have lower insuracne scores.
I need to know the average ins score of someone who earns 20,000 with a kid, as compaired to the average person who earns 100,000 with a kid or 2 kids for that matter.
When you can produce that study, we will have our winner, but i aint seen it yet.
Those numbers don’t exist because you can’t legally gather them. There have been independent studies that show that insurance scoring is right on statistically, but you don’t care about that. It’s much more important to whine about how its bad for this group or that group depending on your political views.
The ONLY way to take race out of the equation is to remove the question from the underwriting application entirely. Proportional statistics in dealing with these matters only distorts relevant data.
Interesting, I point out that it is racism to presume that people who are not white have lower credit scores. You come back and say refer to people as lower income. I never said lower or upper income. The bottom line is you are racist on presuming that minorities are lower income people. Why do you think so little of minorities, do you think they are beneath you or something???
As an Agency owner in the Greater Wash DC area, my business has a wide range of clients encompassing virtually all ethnic backgrounds. When Credit Scoring was first introduced, it was marketed as
“an indicator of a person’s ability to slow pay (or no pay) premiums vs. filing a claim” and studies also showed a greater tendancy for people with lower scores to file more claims. Simply put, this is b.s. Remember, Insurance premiums are paid in advance …. therefore, a low credit person could simply pay their premiums semi-annually or yearly, fixing that concern (about poor payment)…remember claims have ALWAYS been used and should continue to be used as a criteria for premiums.
Rich – Look back through the posts – folks with lower incomes CAN have better credit scores! It has to do with the responsible handling of financial matters – not how much you make.
No racism, no rich vs. poor to it. It is responsble people vx irresponsible people – and we all know that has nothing to do with race or financial status.
Ray theoretically you are correct – But they wont show us the numbers so we dont know for sure.
So if you go just on common sense, if you look at a poor person with a child, they have to make decision regarding new school close, propper health care, hygene and nutrition, paying the heat bill. And when you run out of money, do you say no to your child, or run up the credit card?
The more well to do person has to battle with decisions like, hmm, can we afford the larger house, the more expensive car, the 50 inch plasma or the 60?
Therefore the person with less resources and more pressing needs will more often go into debt just to supply basic needs.
This is common sense, what dont you people agree with?
If we just knew the average score of someone mainkg 20,000 as apposed to a person making 100,000 we would have our answer.
But I have a hunch that the average insurace score of someone making 100,000 is going to be higher.
this is very unfair. especially on seniors, they have no credit cards and pay with cash. they are the first to pay when they receive the bill. large marjority of the seniors have money put away. it has not improved my losses in no way. the credit rating needs to stop. only one this helps in the companies operating the checks. thank you. g. lee
this credit score does not do noting but put down our senior citizens. they have no credit cars or credit. they pay cash for anything they purchase. then ins, co. gives them bad rate. the seniors have money put back and parties with better rate is in debt and will not see themselves out of debt foryears to come. yes we are on front line. (GREED) L.LEE
Specialize in insuring those with low credit scores, have your slogan say “if your credit score is low, we will take you.” Since nobody else wants them, you will make a killing, or will you?
Man, you are stupid arnt you. Who said no body else wants them? They just have to pay more money. As an agent thats just fine with me. I represent customers with varying ins scores.
But as a person, it seems unfair and dishonest to suggest that credit scoring does not disproportionately affect poor people.
Rich,
You are not stupid, you are individual who has an opinion that you are entitled to. Never underestimate yourself, never trash yourself by insulting others. I know you can do better and I know you can use your intelligence. Hold your head up high, you are going places.
I have been fortunate enough to work in an industry that has afforded me to live in an upper middle class neighborhood. My wife is a school teacher who teaches in an average to lower income school district. The one thing that our industry and the education system have in common is that both are arrogantly ignorant. Both feel that penalizing the poor will give them incentive and aspire them to wealth and knowledge. This will never happen, and the excuse that somehow this is right because it rewards the more fortunate is not even true. When we make insurance not affordable to those who need it, we will all pay for it with uninsured claims. Who pays for UM coverage, who funds county health services, the answer is we do. The only one’s benefiting are the insurance carrier’s profits. The education system uses the poor for funding, however, educating the poor need the help in the home. These are simple facts and not statistics.
Many agents do not like credit scoring because they think it hurts their business. When they do get a client that has a marginal credit score, they end up losing money due to high loss ratios, late payments, short lived policies, and the amount of service work that comes with it. Most would probably make more getting a minimum wage job than work with marginal clients.
Where do you live? Most agents I know welcome credit scoring. Credit scoring can possibly drive a potentially bad risk to try another agency and we almost get the “cherry pick” when the companies come back with a good premium for the good credit risks. And I am here to tell you it has nothing to do with our client’s ecomomic level. We have some blue collar folks with better credit scores than some professionals. It is simply a questions of wise management of the assets you possess.
Long live credit scoring as an underwriting tool…
Spoken like a true home office type !! As an agent in the field, I see clients struggling to raise a family and pay insurance premiums. The Exec in his ivory tower with his company car, expense account, profiability bonus and paid health insurance is only interested in increasing profit more and more, so he gets a bigger bonus !! The agent on the front line is the one paying for office and staff and advertising, only to lose the client to a competitor who has lower rates or does not use credit scoring as an “indicator” of possible future losses. Under credit scoring, an older or retired couple, who own their home and autos outright, would have a LOWER credit score and be charged a higher price, than someone who has a lot of debt. Who do you think is the least likely to have a claim ??
I tend to agree a little bit with both of you. I see many blue collar folks who get a great rate in spite of the fact they don’t live in the “best” part of town. I also have professionals who do live in the better areas paying more. Keep in mind that those saying it’s discriminatory are being somewhat racist themselves by assuming that race truly makes a difference. It doesn’t.
In regards to senior citizens, that is my one area of concern. Once a person sells their home and doesn’t use credit as much, they tend to get a lower score over time which does affect their premium. However, we all know that as people live longer and continue to drive, they need to be paying more since they tend to have more accidents.
In order to know if its racist or not we would need to know the average insurance score of all black people as compaired to whites.
That info has not yet been made available though…..
HMMMMMMMMMMMM
No argument that credit has a correlation to claim severity/frequency so the question is; should it be allowed for insurance purposes? Being one who slipped into the quicksand that is low credit but having dug out I can attest that once it happens the odds against climbing out are astronomical. Mine came about from co-signing a loan and was not kept informed by the credit union until it was 120 days past due. One there, you pay more for insurance, autos (you can’t get a loan so you have to buy over-priced pieces of junk from Smiling Rick), credit card rate that rise – even if you’ve never had a late payment, and have to take home loans from loan sharks. But the real kick in the teeth is that more employers are using credit scores so you can’t even get a decent job to earn money to pay back your debt and then you fall deeper in the hole as your credit sinks to new levels. The industry once profitably wrote insurance policies without credit but now that they’ve laid off thousands of underwriters, they can’t afford to lose it as a rating component. Credit is a valid indicator on 70% of the low credit population but for the other 30% who are not making claims (In 40 years of being insured all my claims total less than $10,000) it stinks.
It’s unfortunate the people resort to racism when it comes to credit scoring. People of all races can be responsible credit paying people and people of all races can be irresponsible. The beauty of credit is that is looks at the behavior of one and not race. Martin Luther King did say “people should be judged on the content of their character and not the color of their skin.”
Actually insurexec, show me a sttudy that proves that lower income people dont have lower insuracne scores.
I need to know the average ins score of someone who earns 20,000 with a kid, as compaired to the average person who earns 100,000 with a kid or 2 kids for that matter.
When you can produce that study, we will have our winner, but i aint seen it yet.
Those numbers don’t exist because you can’t legally gather them. There have been independent studies that show that insurance scoring is right on statistically, but you don’t care about that. It’s much more important to whine about how its bad for this group or that group depending on your political views.
The the heck are you talking about??
My only point was poor people usually have lower scores cause they dont have as much money.
Rich people can make a few mistakes and still pay bills.
If we know what the average score of a poor person as compaired to a rich person is we could get some answers.
How is that political and how could anyone disagree with this??
The ONLY way to take race out of the equation is to remove the question from the underwriting application entirely. Proportional statistics in dealing with these matters only distorts relevant data.
Interesting, I point out that it is racism to presume that people who are not white have lower credit scores. You come back and say refer to people as lower income. I never said lower or upper income. The bottom line is you are racist on presuming that minorities are lower income people. Why do you think so little of minorities, do you think they are beneath you or something???
Race is not part of any application that I am aware of, you must be nuts.
As an Agency owner in the Greater Wash DC area, my business has a wide range of clients encompassing virtually all ethnic backgrounds. When Credit Scoring was first introduced, it was marketed as
“an indicator of a person’s ability to slow pay (or no pay) premiums vs. filing a claim” and studies also showed a greater tendancy for people with lower scores to file more claims. Simply put, this is b.s. Remember, Insurance premiums are paid in advance …. therefore, a low credit person could simply pay their premiums semi-annually or yearly, fixing that concern (about poor payment)…remember claims have ALWAYS been used and should continue to be used as a criteria for premiums.
Ahh Insurance exec – You really proved your ignorance now!
It is a fact that on average white people earn more than black people. Look it up you doofass!!
Thats not racism, where racism might come in is when you talk about the reasons why.
Rich – Look back through the posts – folks with lower incomes CAN have better credit scores! It has to do with the responsible handling of financial matters – not how much you make.
No racism, no rich vs. poor to it. It is responsble people vx irresponsible people – and we all know that has nothing to do with race or financial status.
Ray theoretically you are correct – But they wont show us the numbers so we dont know for sure.
So if you go just on common sense, if you look at a poor person with a child, they have to make decision regarding new school close, propper health care, hygene and nutrition, paying the heat bill. And when you run out of money, do you say no to your child, or run up the credit card?
The more well to do person has to battle with decisions like, hmm, can we afford the larger house, the more expensive car, the 50 inch plasma or the 60?
Therefore the person with less resources and more pressing needs will more often go into debt just to supply basic needs.
This is common sense, what dont you people agree with?
If we just knew the average score of someone mainkg 20,000 as apposed to a person making 100,000 we would have our answer.
But I have a hunch that the average insurace score of someone making 100,000 is going to be higher.
Prove me wrong….
That’s you opinion Rich. You have no facts so I would say you need to prove the companies wrong. Insurance is based on facts, unlike your postings.
Thats what im trying to say is that the insurance companies dont have the facts either.
Im not talking aabout opinions, Im talking about HARD NUMBERS. Tell me the dam insurance scores!
But they hide behind the facts that they arent available which is a bunch of crap.
this is very unfair. especially on seniors, they have no credit cards and pay with cash. they are the first to pay when they receive the bill. large marjority of the seniors have money put away. it has not improved my losses in no way. the credit rating needs to stop. only one this helps in the companies operating the checks. thank you. g. lee
this credit score does not do noting but put down our senior citizens. they have no credit cars or credit. they pay cash for anything they purchase. then ins, co. gives them bad rate. the seniors have money put back and parties with better rate is in debt and will not see themselves out of debt foryears to come. yes we are on front line. (GREED) L.LEE
Wow, the loons are out in full force today. I quit this line since the nut cases have taken over.
Specialize in insuring those with low credit scores, have your slogan say “if your credit score is low, we will take you.” Since nobody else wants them, you will make a killing, or will you?
Man, you are stupid arnt you. Who said no body else wants them? They just have to pay more money. As an agent thats just fine with me. I represent customers with varying ins scores.
But as a person, it seems unfair and dishonest to suggest that credit scoring does not disproportionately affect poor people.
Rich,
You are not stupid, you are individual who has an opinion that you are entitled to. Never underestimate yourself, never trash yourself by insulting others. I know you can do better and I know you can use your intelligence. Hold your head up high, you are going places.
I have been fortunate enough to work in an industry that has afforded me to live in an upper middle class neighborhood. My wife is a school teacher who teaches in an average to lower income school district. The one thing that our industry and the education system have in common is that both are arrogantly ignorant. Both feel that penalizing the poor will give them incentive and aspire them to wealth and knowledge. This will never happen, and the excuse that somehow this is right because it rewards the more fortunate is not even true. When we make insurance not affordable to those who need it, we will all pay for it with uninsured claims. Who pays for UM coverage, who funds county health services, the answer is we do. The only one’s benefiting are the insurance carrier’s profits. The education system uses the poor for funding, however, educating the poor need the help in the home. These are simple facts and not statistics.