SSN use

TerryinMD · Jan 18, 2005

Back a year or so, the Peoples Republic of Maryland lawmakers decided that insurance companies CANNOT set rates according to your credit rating. Since that happened, our insurance rates have gone up. Our house insurance nearly 50% and our auto insurance maybe 10% - it's hard to tell since we've bought new vehicles and have two teenage drivers!!

I was going to get on my soapbox about credit ratings and peoples behaviors, but decided it just isn't worth the rant without going into a long, drawn-out verbiose treitsie on social behavior, etc. Why ruin a thread.... /forums/images/graemlins/tongue.gif

Terry

frank_f15 · Jan 18, 2005

( it's hard to tell since we've bought new vehicles and have two teenage drivers!!
)
That is the same with anything , try to compare your gas or electic bill to last year /forums/images/graemlins/confused.gif almost impossible, different rates, different temps.

LBrown59 · Jan 18, 2005

( Being as money hungry or worse then the banks they wanted in on the credit scoring fleece the bankers were/are cashing in on. There is no independent study indicating that poor credit and or scores increases insurance claims. 
Do you have any proof of this, or is this just your opinion? )

21 years experience in the financial field .

LBrown59 · Jan 18, 2005

( Back a year or so, the Peoples Republic of Maryland lawmakers decided that insurance companies CANNOT set rates according to your credit rating. Since that happened, our insurance rates have gone up.

Terry )
=========
MikePA Here's your proof.

LBrown59 · Jan 18, 2005

( Back a year or so, the Peoples Republic of Maryland lawmakers decided that insurance companies CANNOT set rates according to your credit rating. Since that happened, our insurance rates have gone up. Our house insurance nearly 50% and our auto insurance maybe 10% - it's hard to tell since we've bought new vehicles and have two teenage drivers!!
Terry )
So what are you saying here?

MikePA · Jan 19, 2005

MikePA Here's your proof.
Sorry, that's not proof. Just because two events occur in sequence does not imply the first caused the second. Using that logic, someone could 'prove' the rooster crowing causes the sun to rise.

MikePA · Jan 19, 2005

21 years experience in the financial field.
IOW, it's your opinion.

'Experience in the financial field' as what? Banker, broker, what? Just curious.

JDgreen227 · Jan 19, 2005

We are getting off topic here, but I am going to throw in my nickle anyhow---

Many companies that issue auto and homeowner insurance rates in Michigan are basing their premiums on credit scoring, but legislation recently introduced will end that practice if it become law later this year. According to what the information I receive from Triple-A says, I get about a 40% discount on my premiums because we have a high credit score.

My agent says his company bases their premiums in part on credit scoring because they feel policy holders with good credit scores are more responsible, and therefore less likely to make a claim.

Any comments?

kerr · Jan 19, 2005

ALL-STAR? /forums/images/graemlins/shocked.gif

MikePA · Jan 19, 2005

Actuaries at insurance companies, any kind of insurance, are always working on finding predictors of risk. They take actual claim data and try and determine what is common about the claim, about the claimant, etc., In this case, they run statistical models against the data to determine if there is a relationship between income and claims being filed. These same models were probably used and discovered a correlation between;

miles driven and accidents
gender and accidents
age and accidents
age and gender and accidents, etc.

While insurance companies certainly have made mistakes (both deliberate and honest), common sense would dictate that they don't just develop rates that have no basis in claim history. If they did this, they'd have no way of knowing if they will make or lose money on a given line of insurance.

They have to be able to do this so they can estimate what their potential payout will be which, in turn, determines premiums. When outside regulatory bodies agencies decree that certain criteria can not be used (whether or not it's a valid or invalid predictor) then they are forced to search for something else. For example, if (maybe this has already happened), if a regulatory agency decrees that males and females must pay the same rates, then rates will rise. Why? They can not lower male rates to the female rates or they'll lose money. So, the only thing they can do is create a blended rate, which means females will end up paying more.

Note: None of the aforementioned explanation applies for those who believe that people in black helicopters and the Trilateral Commission set all rates and that insurance companies are the embodiment of all that is evil. There's no logic or proof that will convince them. /forums/images/graemlins/tongue.gif As Stevie Wonder said,

When you believe in things that you don’t understand,
Then you suffer,
Superstition ain’t the way.