Our car insurance premiums just went WAY UP!!

[Pandora]

There are only 14 states that do not credit profile in the US - if you're not in one of those states, you're SOL Its not a "pick and choose" option - either your state does..or it is one of those 14.

Go to your state's website and look for the Department of Insurance's section - it will have if they are allowed to credit profile or not. If you cant find it online, call the DOI and ask - they'll be more than happy to help.

[tobee43]

There are only 14 states that do not credit profile in the US - if you're not in one of those states, you're SOL Its not a "pick and choose" option - either your state does..or it is one of those 14.

Go to your state's website and look for the Department of Insurance's section - it will have if they are allowed to credit profile or not. If you cant find it online, call the DOI and ask - they'll be more than happy to help.

pandora interesting enough when i lived in nj i was with one company that DID do it, and the other that DID not.

when i got here to florida, i was told they ALWAYS do it you have no choice. however, upon renewing our auto and now that we had a moment's time, i was able to make a few more calls and found out, although MOST do the credit check there are many companies that do not.

in nj both the companies i dealt with where in fact "top" insurers...yet one chose NOT to use the credit reporting system.

i asked about here in florida WHY is it that you THINK that people with bad credit reports are necessarily "bad" drivers.

i was surprised at the answer...or actually shouldn't have been, the agents response to me was that statically speaking, people with "bad" credit scores are more apt to file fraudulent claims. ok, that makes some sense...

but they i said....BUT what about this economic crisis which is forcing the hand of so many to chose between food or being late or not paying on the cc's because of job loss etc. she absolutely agreed with me and said that it would be nice if someone reevaluated the system. fat chance....

we were NOT that effected...as our scores were 690 and 685...of course we most likely would have gotten an even better rate (although, i think she was trying to make me feel better after hearing our plight, and told me we got the BEST rate!)

[Pandora]

Every year the issue of the legality of credit profiling for insurance is brought up before our states reps and to Congress..and every year its shot down. Go figure.

Even our DOI head, whom I've spoken to many times over this issue says its wrong and its brought up each year. Told me to keep voicing it to any and all in my district and state that will listen. The bad thing is it not only affects your auto insurance but it affects any homeowners insurance you have as well. our driving record is crystal clear - and my driving record has nothing to do with my credit - hell I've never even been late paying a bill with my ins. company - or any other bills. What put us here? Job loss... only bill ever late on? 2nd mortgage and prop. taxes - thats it.

Plain english ... it blows. :/

[tobee43]

Every year the issue of the legality of credit profiling for insurance is brought up before our states reps and to Congress..and every year its shot down. Go figure.

them and the BANKS....they are simply wearing us down! (or me anyway...) i think i'm starting to get too tired of constantly fighting back...but hopefully that's JUST this morning....and need more coffee?

[wanuvas]

I work for one of those large, evil auto & home insurance companies I'm not going to name.

A few things on insurance (credit) scoring for pricing a home or auto policy... Some states allow it, some don't. Some require it to be re-ordered every so often or allow the company to do so (think of it like driving histories usually done every 3 years) and make any subsequent changes to the rates. Some require it to be changed to whatever the new score dictates and some allow you to keep the best rate between the old score or the new score. It just really depends.

Generally speaking, if you are in a plan that is currently not using insurance score then you can't be forced into a plan that does unless the company does it on renewal to all customers in the that state & company. The company has to get the state to agree & they usually don't &/or the combined deluge of calls to the company makes it impossibly expensive to force people to change en masse. What happens over time though is that people die, leave the plan etc. the claims costs get spread over an ever smaller base of new customers because almost all carriers use insurance scoring for all new and current plans. So this causes premiums to rise to a point where people either switch voluntarily to a new plan with the current carrier or move to another company.

A few other facts... Insurance (credit) scores are generally soft checks i.e. they don't count as an inquiry and they are modified to ignore certain types of debt for actuarial purposes. An example is medical debts. The letters companies send out are required under the federal fair credit reporting act (FCRA) if scoring is used which a lovely piece of legislation that requires disclosures but does not specifically give guidance on what must be disclosed to the consumer. So what happens is you get a very dense lawyerly letter that raises your blood pressure and makes you madder than a hornet because it's deliberately vague enough to comply with the statute but not detailed enough to give you a lot of information or give away insights into propietary pricing models companies use. And you still get sued in a class action status which really just contributes to everyone paying higher rates.

Finally... most of us here in this forum have poor credit scores so we pay higher rates. Keep in mind though that insurance is about pricing for risk of loss not if a perosn is "good" or "bad" and actuarilly speaking the science is as solid that higher or lower insurance scores are a significant predictor of risk. No different than age for life insurance or driving history for auto or how far your fire department is from your house for homes. Some people pay lower premiums than they otherwise would without insurance score as one of many variables used to price a policy.

The advice here is good.. Shop your coverage around to several reputable companies but don't focus just on the price. There are lots of features basic auto & home companies offer that are actually quite valuable in certain accidents/claims. For example full replacement cost on your dwelling or a flat deductible rather than actual cash value on roofs or % deductibles for wind/hail losses... but the first examples cost more money every time you have a policy.

[Fallonedward]

Our state does the same thing and ours when up about $450 more for 6 months coverage. If you live in a state that bases on credit score their is nothing you can do

We've had the same insurance company for 11 YEARS now. We've never missed a payment, never been late and never had a lapse in coverage. Now suddenly they decided to start basing our premiums off our credit score. It raised our rates $400 every 6 months!!! That's a huge increase for us.

Do you guys know of any companies that don't use your credit score? I'm definitely going to start shopping around before my renewal and see if I can find anything lower than this

[Amy26]

Really cool thing though... I'm a member of NFCU and they apparently have discounted rates with Geico. I tried it out and yes I can now say "I did save 15% or more by switching to Geico"... I saved almost 50% actually. My current policy with Liberty Mutual was about 1500 a year. I was able to get a policy with similar coverage at Gecio for 271 for 6 months. So, if you're with a CU that gives a discount on insurance... I highly recommend it.

[Fallonedward]

I have AAA as well and they told me in 6 months time they would probably be able to reduce my rate but if not, I will shop around and find a company that can and will reduce my rate

I live in a state that does credit checks for all types of insurance. I found that AAA was the lowest rate because they have so many other discounts that negate any extra money that filing bk costs insurance wise. My score has gone up 80 points since discharge and my insurance rates have gone down 30% since discharge. I am only 10 months post discharge so even if you have to get a six month policy, you will most likely be better off rate wise in six months.