| Subject: Insurance companies lying about credit scores to get consumers money |
Author:
Carrie
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Date Posted: 10/18/06 1:31am
In reply to:
THartill
's message, "Does it matter?" on 10/17/06 3:12pm
I guess your attitude is one of the reasons I am soooo for measure 42 and sooooo against insurance companies myself. This really hasn't anything to do with insurance companies charging whatever they want for premiums, it has to do with them doing it based on bogus information or just to squeeze another nickel out of the consumer as an industry and they are acting on this as an industry.
My credit score, after taking a hit for various reasons (signing for kids college loans, having two items not mine -and will take about 90-120 days to take off my report once I prove I wasn't born in 1955 so it couldn't be me for one item and the other I have to prove I never lived in another state- on the report plus land taxes supposed to be paid by mortgage company with escrow weren't so I paid them and it still shows as being unpaid) is a score of 640ish. I want to change insurance companies so have been getting insurance quotes. I received quotes from four companies and all four have sent me notices saying that if my credit score had been higher the premium quoted would have been lower and the one that refused me insurance said that the reason I had been refused insurance was because of my credit score. The quotes are $100 more per month than what I am currently paying and nothing has changed, except my credit score.
From what I understand, 80% of all consumers will have an error on their credit report atleast once in a five year period, which is why you are supposed to check it every year. In the past year we (my husband and I) have received two alerts regarding possible identity theft. Once, from our bank when all of Citibank's system's were violated (and we found out Wauna Fed's info was held/stored by Citibank) and just recently when a credit card we had cancelled 10 years ago informed us that they had not destroyed our information and had just been informed that our information was "misstored" on a series of disks that has just come up "missing" and although they aren't worried about such old disks we should keep an eye on our credit records for the next year!
Yet, these are the people we are supposed to be trusting to give our credit information to the credit scoring companies, who turn around and make errors on our records as well, who in turn hand off the info to the insurance companies to raise premiums accordingly to all of those people who, supposedly, have some sort of correlation between their debt score and how they drive? And notice how the commercials don't say that, they say "studies show people with low debt scores tend to file more claims." There are more people in the United States with a low debt score then there are with a high debt score so obviously more of them will be making claims, but not based on overall percentages.
According to the Insurance Information Institute, an insurance score is a numerical ranking based on a person’s credit history. This is used by ALL insurance companies when rating someone and giving them a quote and it is why rarely will a quote deviate more than a $10 or so per company in a state that allows credit scores to be used. If the quote does deviate more than that, before the final papers are done and money is paid, suddenly the final quote will change. Geico saving you hundreds will not materialize, neither will Progressive's. They can make that claim because it is a national average claim and those states which do not allow insurance based on credit scores can have huge fluctuations in their rates, which insurance companies DO NOT LIKE. They want as much uniformity as possible.
I, too, don't want government always into what they don't need to be but the insurance cos are taking people for a ride here, and it is all of them as an industry. Furthermore, if they are going to use credit scoring for this, then it is another thing that congress needs to take the credit reporting agencies to task for for not doing a better job with evaluating the information they are receiving. They are now much more than just a credit storing service, especially when at least one of them is also a collection agency! If this information is being used in so many aspects of one's life then heavy duty fines need to be levied against companies which misinform the credit reporting agencies, the companies who don't promptly remove information that has been proven wrong and the credit reporting agencies which take 90-120 days to change consumers information. They say days because it looks better then saying 3-4 months -mind you that's AFTER they admit anything needs to be changed! But, change your address and see how quick that gets into your credit report! LOL!
What studies are you speaking of, tryan, that are *wrong*? The only one I know of being done at all is a University of Texas study that has not been dublicated. Pretty shabby "research" and sure as shinola if that was the only "study" done on medicine (such as CoEnzymeQ10) or a procedure that "works wonders" (such as yoga and macrobiotic diets) to prove it "works" insurance companies would HOWL if congress forced them to cover it based on one or two studies.
By the same token, when insurance companies use shabby research to leach money off of consumers, and then use scare tactics to keep it, congress should step in. We are talking about forcing people to turn over their social security numbers (there isn't an insurance company out there that will issue you a policy in Oregon, at this time, w/o your ssn and looking up your insurance score, whichis based on your credit score) and using their private information in order for them to be able to use their cars to drive. The only way out of it is to have enough money to not need insurance.
I think this is one of the times we need a new law.
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