Insurance BS

[Racing Rice]

I dont know how many of you know this, but I was watching the news the other day and when I heard this I about feel out of my chair.

A lot of insurance companies base you premium on your credit report. They say that studies show people with bad credit are more likely to have bad driving records.

This means, if your the best driver in the world and you have a spotless record, but you have a low credit score, or no credit.. You will be paying a lot more for your insurance then someone who is the worst driver in the world with great credit.

Does this outrage you yet. If your someone that doesnt have a great credit score, then you should be.

The good news is, there are some companies that dont do this [yet.] Thats why its so important to shop around. You could save yourself a ton.

[ebpda9]

dude that is just crazy, but that would explain why my premium dropped dramatiucally last month from 495/6mos to 245/6mos on the same car and the same full coverage.

thats crazy... so your saying if i had better credit i would be paying less for my RL?

[Racing Rice]

Originally posted by mt.biker
thats crazy... so your saying if i had better credit i would be paying less for my RL?

Depending on whether your Insurance company uses credit history when figuring your premium.. Yes that could be true.:o

[Addict]

Well I'm screwed either way. My driving record is, well, a bit spotty. Ever gotten a letter in the mail mentioning the "Defensive Driving" classes? I have.
My credit is there. Its not bad, but since I haven't owned my Si all that long its not as good as it could be.

I gave up on shopping around. When you can't remember all your violations its tough to look around.

Maybe what you heard was incorrect, but I believe that the "low credit = bad driver" is not what the insurance companies do.

There is a strong correlation between bad credit and the likeliness you will file a claim. That has no relevance to your driving ability or record. The more likely you are to file a claim, the more money you are likely to cost the insurance company, therefore the higher your rate should be.

From a standpoint of paying for your risk, it is only fair to charge higher risk people more money. Risk is partially determined by how likely you are to file a claim. From a larger perspective, insurance is never fair.

There are problems with this, though, since people with bad credit tend not to have as much money (which is why they're more likely to file a claim), and thus can afford high insurance premiums less, and are more likely to go uninsured if their rates are hiked, which increases the uninsured motorist insurance rates for insured people.....you get the point.

b

[4jacks]

Spoonge, brings up a good point, but either way, math is math, you can't argue with it. No insurance company is going to do a detailed backround check on everyone that they insure, it would just be impossible, and cost more, for everyone. the only logical answer is to catagorize people. To do this the best catagories are the ones that prove to the most accurate, as to WHO will COST money, whether its by age, sex, race, or credit. Thier not saying, we don't like this group of people so we're going charge them more, thier stating that this group of peope is such and such more likely to file a claim, than this one and will be charged such and such more.

if you disagree... just don't fill out any surveys.