Reply With QuoteViffer,Originally Posted by VifferFun
Does your company increase the premium for poor credit? Or do they decline to insure the individual?
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Section 6 of the Habitational Insurance Application reads in part:
"I have provided personal information in this document and otherwise and I may in the future provide further personal information. Some of this personal information may include, but is not limited to, my credit information..."
This appears approximately half an inch above where an applicant is to sign. While insurers do not facilitate credit, they do accept transferrence of risk. When a homeowner policy costs approximately $500-$1,000 per year and the potential payout is well into the hundreds of thousands with the insured usually having an option for a cash payout, credit score can be an indicator as to whether or not an individual is likely to make a claim looking for cash.
Viffer,
Does your company increase the premium for poor credit? Or do they decline to insure the individual?
It's pure bull**** and you know it.
R e a d S l o w l y ! - Children at Play.
They are NOT allowed to do either.
But we all know that they can see the information and make up another excuse to deny or drive up.
Pure scum practices.
I am not a lawer caller... but by the hell, I would love to see a class action over this.
R e a d S l o w l y ! - Children at Play.
Yes, I believe we offer better-than-average rates to people with good credit, and poorer-than-average rates to people with poor credit, but ONLY for Home/Property insurance.
A lawsuit can only occur if someone is actually breaking the law. It is completely within our right to collect credit information for people applying for HOME insurance (not Auto). Avi already mentioned that you agree to this just one line above the place where you place your signature. If you do not actually read and understand the legal documents that you place your signature on, then I would advise that you start doing so.
Note that your credit information is not being used to rate your Auto/Bike, but yes, some companies are lobbying to make it allowed. For the people with good credit, this is a great thing because their rates will be even more competitive.
I have mentioned this to you before; if insurance is pure crookery and profit, then invest why not invest your life savings in the insurance industry? It will be double or triple-digit growth with no possibility of loss according to you.
Cheers!
I am probably one of the few people that actually read most of this stuff...
You may not use it officially, but I will bet my *** that you use it behind closed doors....
Do you expect us to believe that rates are going to go lower
Your rating system is not about helping us, it is about protecting you, again, who in the hell are you trying to kid?
R e a d S l o w l y ! - Children at Play.
Re: Suspended lisence?
I understand this practice as it relates to risk assessment in it's purest of forms... however, it doesn't make much sense to me to look at an individual who's in financial difficulty and the answer to that is to charge them more? What happened to helping one another?
(Sorry Viffer, I may have just handed Eastcoast a gas can!) lol.
is that not why insurance companies were formed in the first place? to help others who have fallen on hard times?What happened to helping one another?
I am sure that was the case.... many many moons ago.
R e a d S l o w l y ! - Children at Play.
Hey Avi,
Actually, it really does make sense. The credit score has been proven to be a better predictor of future claims than even past claims history. Of course we are not currently using this information against anyone with a poor credit score on the Auto end, but there are companies who are lobbying to allow it for rating purposes.
Cheers!
No, we don't use credit scores "behind closed doors". It is a highly regulated industry, so even if we wanted to do this, it would be caught and there would be consequences to pay.I am probably one of the few people that actually read most of this stuff...
You may not use it officially, but I will bet my *** that you use it behind closed doors....
Do you expect us to believe that rates are going to go lower
Your rating system is not about helping us, it is about protecting you, again, who in the hell are you trying to kid?
I never once said that rates are going to go lower; they would actually remain neutral as a whole. The premium for an individual may go up or down, but the overall amount of premium collected would be equal. For example, suppose person P has a really poor credit score and person E has an excellent credit score. Suppose P and E are both paying $1000/yr when credit score is NOT considered. When credit score is introduced as a new variable, then person P might now be paying $1100/yr, and person E only $900/yr. As you can see, the overall premium collected is still $2000/yr, but person P is now paying more than person E to reflect their increased risk of a future loss. Hopefully this makes sense.
Insurance is about helping both the insured and the company; we're not a charity in the business of giving money away. If you think we are pure profit, then explain why someone shouldn't invest their life savings in the insurance industry? No one has ever been able to come up with an intelligible counter argument to that yet. . .
Cheers!
Last edited by VifferFun; 09-29-2008 at 01:44 PM.
For you my good rate setter....
R e a d S l o w l y ! - Children at Play.
I think there should be zero profit on the public liability side of the equation in the industry...
Insurance industry had a run on the population here in Canada, and there is no amount of jibber jabber that you can produce that will convince me otherwise.
R e a d S l o w l y ! - Children at Play.
You don't think that the correlation between variables is considered by insurance companies? We use Generalized Linear Modeling, but I'm definitely not going to even attempt to start explaining that here. . .
You could not have zero profit on liability insurance, or who would want to offer it? No company (or person for that matter) accepts risk where the the return to match the exposure. While you are in Wikipedia, perhaps you should try looking up articles on "Economics" and "Risk and Return".I think there should be zero profit on the public liability side of the equation in the industry...
Insurance industry had a run on the population here in Canada, and there is no amount of jibber jabber that you can produce that will convince me otherwise.
When the risk doesn't match the return, you are in a bad situation. Have you heard about the sub-prime mortgage crisis in the USA and their government's $700B bailout plan? Have you heard of AIG and how it nearly went bankrupt a couple of weeks ago if it weren't for a government bailout? Have you heard of Fannie Mai and Freddie Mac having to be taken over by the US Government? Or how about Lehman Brothers? When risk doesn't match return, all hell breaks loose. . .
Cheers!
You must think I am an idiot or something Viffer....
There are allot of places (countries) that provide cheap liability insurance to the masses, then if they want more, they have to by more (from another vendor usually)
When something is required by LAW, then it is given to a bunch of greedy crooks, there is money made.
Comon... I want to see more huffin and puffin...
R e a d S l o w l y ! - Children at Play.
Hahaha, you aren't going to see any huffing and puffing from me . . . I try to keep my cool :P I was in the same boat as you once, before I understood the ins and outs and why things are the way they are.You must think I am an idiot or something Viffer....
There are allot of places (countries) that provide cheap liability insurance to the masses, then if they want more, they have to by more (from another vendor usually)
When something is required by LAW, then it is given to a bunch of greedy crooks, there is money made.
Comon... I want to see more huffin and puffin...
If you want this "cheap liability" insurance premiums that you speak of, there would first have to be legislative changes that limit the payouts to people who are "hurt". Yes, I used the quotations on purpose. Talk to your government if you want to see something done about this. In addition, I've already explained to death how regional differences affect insurance premiums in my other thread.
I'm not saying that insurance companies are not in the business of making money . . . that is the prime objective of all non-charitable organizations. However, we do not take excessive amounts of money for the service we provide. Again, I would love to hear you explain why your entire investment portfolio is not completely invested in the insurance industry. . .
Cheers!
I would actually support this...
Its all here is black and white.
http://www.cbc.ca/news/background/insurance/
For Graphical People...
R e a d S l o w l y ! - Children at Play.
Also in the article (which I have explained before in a previous thread):
"Griffin noted that the numbers have to be put in context. Between 2000 and 2004, the industry made six cents profit for every dollar of premiums and investment income collected.
"The insurance industry's return on equity for 2004 is strong but insurance is a cyclical business – years of profit are often preceded by years of low returns," Griffin said. "Over the last five-year period, the ROE was 8.6 per cent. Many other sectors of the economy have averaged closer to 20 per cent."
The insurance industry makes money mainly due to wise investing of funds. We are entering into the hard market again this year, and it's already looking pretty bad. Combine that with the failing economy and the future doesn't look pretty.
Once again, I want you to explain why everyone on this board should not run out, sell all of their assets, and invest in the insurance industry if it is such a sure bet?
I commend you for actually digging in to the material though . . . it isn't exactly what most people enjoy doing in their spare time
Cheers!
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