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As a former P&C agent I believe using credit scoring in determining insurance premiums is utter nonsense and is simply a way for insurance companies to charge certain people a higher premium without a justifiable increase in risk. A persons credit score has absolutely no correlation to how good a driver they are, whether they lock their car, etc etc etc..
It is already illegal in a number of states and should be banned nationwide. Insurance companies are not lenders. Insurance is paid for in advance, no credit is being extended. If a policyholder fails to pay their premium the policy gets cancelled.
One of the best rated and most profitable insurance companies in the US, NJ Manufacturers, does not use credit scoring and they do very well.
As a former P&C agent I believe using credit scoring in determining insurance premiums is utter nonsense and is simply a way for insurance companies to charge certain people a higher premium without a justifiable increase in risk. A persons credit score has absolutely no correlation to how good a driver they are, whether they lock their car, etc etc etc..
It is already illegal in a number of states and should be banned nationwide. Insurance companies are not lenders. Insurance is paid for in advance, no credit is being extended. If a policyholder fails to pay their premium the policy gets cancelled.
One of the best rated and most profitable insurance companies in the US, NJ Manufacturers, does not use credit scoring and they do very well.
There's way too much actuarial data which states that credit score is a better indicator of claims risk (not driving habits) than even a motor vehicle report - one study was linked earlier in this very thread.
It's only prohibited in 3 states, 23 have disclosures and "adverse impact" statements that must be delivered.
I just feel as though insurance is a big scam and waste of money. You pay into a system that lies to you and promises to take to care of you then when **** hits the fan they are no longer able to help you. I am currently fighting a crappy insurance company that is all about denying claims. They get their bonuses for all their denying crap. Fed up with my insurance company, ready for someone else.
You might not see a big decrease in your insurance until you turn 30!
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