Is it fair to use credit scores to help determine your insurance rates?

Did you know that in Nevada your credit rating can affect how much you are charged for car insurance? For many living in the state, credit is a major factor in their rates going up. For example, if you are behind on your mortgage payments, your car insurance rates could increase. Do you think it is fair to use credit scores to help determine your insurance rates?

Comments

[Ann E]

This is another ridiculous maneuver to get more money out of us. What in God's green acre does a credit score have to do with insurance??? This is so much B/S!!! Most of us are already struggling with this insane economy!! What is this world coming to???? We are losing all of our rights, and freedoms. We are nothing but a bunch of 'pawns' like cattle herded into slaughter...we have no say about anything!!!! Next thing we will all be wearing 'Burkas' and living in caves!!

[joel z]

I think the insurance co are just tring to rip us off and the state of nv is doing nothing to help us I have clear record for the last 30 years plus

[JR Davis]

The use of credit in insurance premium underwriting and rating is permitted under Chapter 686A of the Nevada Revised Statutes. More specifically, NRS 686A.600 – NRS 686A.730 (http://www.leg.state.nv.us/NRS/NRS-686A.html#NRS686ASec600) allow for limited use of credit information for insurance premium purposes. These statutes were passed by the 2003 Nevada Legislature (Senate Bill 319).

Insurance industry believes that their statistical data shows a correlation between certain credit activity and the probability of an insurance loss. They also claim that majority of the consumers benefit from the use of this technique by way of lowered premiums. I respectfully note that credit based models are used by insurance companies nationwide (excepting a few states).

For credit based insurance scoring methodology to be further limited or banned, the current law would have to be revised. Only the Nevada Legislature has the authority to amend the statutes.

[Frank Mahoney]

I am a retired highway Partolman
Westchester County Parkway Police New York

You can not show me any record or statistic that show bad credit bad driver. I would like to see Them.

[Linda Peraldo]

We have been with Farmers Insurance for just under 30 years. Due to the financial crisis here in Las Vegas we have lost our home, filed a BK 3 years ago and lost both of our jobs. Even in this fragile state we have not had a late payment nor any credit issues. In May when one of our cars came up on lease we elected NOT to keep the car but keep our Explorer instead so removing the car from the policy for obvious reasons. Also, DMV stuck it to us with NO REFUND ON THE LICENSE PLATE SURRENDER. That's another story, too. When I was finally able to locate employment went out to purchase another vehicle. Because we now added a car Farmers now decided we were a bad credit risk so raised our rates stating we were a risk!!! No tickets, no accidents and had a Preferred Rate. Tell me what is fair about this? Angry over being "double dipped by Insurance & DMV"

[badAllstate]

No it is not fair. I just received my SafeDriver rebate check from Allstate - because I am a safe driver - right after having my rates increased because my credit score has gone into the trash in the past 3 months - I have had excellent credit for 20 years, but after being unemployed for 9 mos, exhausting my severence from being laid off, my savings and unemployment, i finally had to chose between my house payment and my credit....their study in no way reflects what is currently going on in our economy.... and as others say - it doesn't even follow that bad credit makes bad drivers. It should be illegal for employers, potential employers and insurers to check our credit. My last employer - who I worked for 7 yrs - checked my credit after 4 years. Was that legal? It wasn't connected to a promotion (I had been promoted the previous year). What business did they have checking my credit?! Its ridiculous, these people do whatever they want, and we don't complain because we need our jobs, we need insurance....

[Michael K. Casler]

Here is how it would be fair, but I doubt that it works like this. If the insurance company published a scale where a certain credit score was equal to a certain addition or subtraction in your insurance premium, that would be fair. It would work like this as an example: if your credit score was 625, that would be considered neutral with no effect on your premium. With every 10 points up or down from 625, your premium would either decrease or increase by $ 15.00 / mo. That system would be fair but I'd be shocked if it works that way. You should follow up the story and ask insurers how it works and then report what you find.

M. Casler
Las Vegas, NV

[www.facebook.com/profile.php?id=1625552696]

Credit scoring usage for insurance rates, employment screening or apt. rental approval process should be illegal not only this state but on a federal level nationwide because credit scoring was never intended for this purpose and these three above mentioned uses are NOT a request for credit of any kind. In two of these examples you pay month to month with credit being extented at all. In regard to employment credit rating tells an employer NOTHING about ones ability to perform a job. As a matter of fact Also this practice is discriminatory and keeps people down based on one late payment in a ten year period. With Nevada leading the nation in foreclosure, bankruptcy and high unemployment more than half our state will find it impossible to rent a decent apt for their family, be unable to drive a car legally with insurance or find a decent job. Rich people who do not have credit score issues will dominate virtually every aspect of our exsistence and the American dream will no longer exsist for
millions of people who lost a job and paid late on a credit card or who were ill and could not pay medical bills so they filed Bankruptcy which is the number one reason people file. PLEASE write your congressman, senator and the house banking commitee, Barney Frank and let them know, this must stop now or our entire country will be torn apart by prospective employers, landlords and insurance companies,who are abusing what credit scoring was intended for.

[Rich]

Absolutely not, its amazing what insurance companies can get away with. Our credit and our social security numbers are supposed to
be protected not used as tools to find more ways to rape the consumer of their hard earned money. Direct coraltion WOW, did
anyone watch that guy getting interviewed smiling and justifying the insurance companies actions, hello people!! Lets do a survey on Lazy overpaid government workers
that get their palms greased by big buisness to go along with big buisness's justifications being a direct coralation on terrorism. Yes im being facetious but
hopefully getting my point across.
The hangmans come to town people and who's gonna help stop him.

[judi (please do not mention last name) lynn]

A RESOUNDING, ABSOLUTELY, POSITIVELY no!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

I POSTED A COMMENT WITH YOU ALL YESTERDAY ABOUT THIS WHEN I FIRST HEARD YOUR ANNOUNCEMENT ABOUT THIS... I FEEL IT IS LUDICROUS AND THE GENTLEMAN FROM THE INSURANCE COMMISION YOU SPOKE WITH TALKED IN CIRCLES... MY DRIVING RECORD IS JUST THAT MY DRIVING RECORD AND NOONE ELSES... I HAVE AN IMPECCABLE RECORD OF NEARLY 40 YEARS OF DRIVING... ME BEING SLOW WITH PAYING ANYTHING MEANS NOTHING ABOUT MY DRIVING... AND UNLESS YOU EXPLICITLY SIGN AUTHORIZATION FOR SOMEONE TO OBSERVE YOUR CREDIT HISTORY THEN IT SHOULD BE AGAINST THE LAW FOR THEM TO DO SO (MY SAME FEELINGS ON THE SAME SUBJECT WITH EMPLOYMENT HIRING YOU AIRED EARLIER)

YOUR TENTATIVE EMPLOYER OR INSURANCE COMPANY SHOULD NOT BE GIVEN SUCH AUTHORIZATION. YOUR JOB EXPERIENCE SHOULD DICTATE JOB BEHAVIOR AND YOUR DRIVING RECORD SHOULD DICTATE DRIVING BEHAVIOR...

LAST YEAR WHEN I GOT MY YEARLY RENEWAL WITH A COMPANY I HAD HAD FOR OVER 10 YEARS and WITH THE SAME VEHICLE, I WAS SHOCKED TO SEE IT HAD, WITHIN A FEW DOLLARS, DOUBLED... IF ANYTHING IT SHOULD HAVE WENT DOWN...

WHEN I CALLED THE COMPANY, THEIR COMMENT WAS:
"USUALLY LOWER SCORE PEOPLE HAVE BAD DRIVING RECORDS"
MY COMMENT TO TAHT WAS:
"THEN RAISE THEIR RATES not MINE. YOU SHOULD only BE CONCERNED WITH MY HISTORY WITH YOU. I HAVE HAD THE SAME VEHICLE AND ADDED OTHERS WITH YOU FOR OVER 10 YEARS AND WITHOUT INCIDENT!!! that SHOULD BE YOUR ONLY CONCERN"

IT WAS A NO WHERE TO TURN CONVERSATION SO I CONTACTED ONE OF MY CLIENTS WHO IS AN INSURANCE AGENT. HE TOLD ME IT IS THE SOLE DISCRESION OF THE INSURANCE COMPANY AND CERTAINLY THEY SHOULD TAKE A MORE INDIVIDUAL LOOK AT CIRCUMSTANCES. SO AFTER 10 MINUTES ON THE PHONE WITH HIM AND A FAX TO ME AND BACK TO HIM WITH SIGNATURE, I CHANGED COMPANYS!!!

BTW, I HAVE RECIEVED APPROXIMATELY 10 LETTERS FROM THE OLD INSURANCE COMPANY BEGGING ME BACK...

IF THAT IS THE CURRENT LAW WITH THE STATE OF NEVADA, THEN IT needs TO BE GIVEN A CLOSER LOOK!

WE ARE AT A TIME IN OUR HISTORY OF "FREE" AMERICA THAT THE "ALMIGHTY" DOLLAR IS "out OF hand"!!!!!!!!!!!!!!!

SINCERELY,
JUDI

p.s. I appologize about the caps LOL
I just went back to proofread and saw what I had done:
lock was on and where I meant it to be caps is small and vice versa...
anyway, the thoughts remain the same :))

[sarah]

Since the recession there are many new circumstances that we all face. The insurance comapny should take into consideration that long term job loss in a recession will drop your credit score as you will get behind on payments with no or less income to live on. They need to have a rating system that takes into consideration your past history prior to the recession or job loss and NOT slam the consumers with higher rates, when we have less income to pay out bills. Even the most reponsible person can still be a road rage type driver, under the right circumstances. All drivers pose a risk of some sort at one time or another. Not just those who's credit score has dropped like a rock since they have been unemployed.

[Nancy Jameson]

No, it is unfair & arbitrary! The real reason they now are doing this, is to strong arm people into paying off their creditors!

My husband is a responsible driver,yet his Fico score is only 650 due to recently discharged from CH 13bankruptcy

Then there are many people with Fico scores over 800 who are irresponsible drivers, who cause vehicle collisions

It is utter BS! There should be a law against auto insurance credit profiling.

Peoples insurance rates should be according to their driving record

[Jim Ullrich]

absolutely NOT!!! How absurd to judge my driving history by looking at my credit score.

Just another lame excuse to gouge the consumer.

[Leona]

No it is not fair to use credit scores to determine auto insurance. If you pay your bills on time for years and have a clean driving record for years, then you are suddenly laid off and cannot pay high rates, what is a person to do? Just because I am laid off for a while, does not mean I will drive crazy. The two are not related.....

[Nancy Anderson]

Of course it's not fair but when has that ever been considered for anything. It's just another way for the Insurance companies to make more money from those who can afford it the least.

[Selene Martin]

Is it not fair! What about those that had to file bankruptcy due to the 9-11-01 because they lost their jobs and health insurance and racked up medical bills instead of dept. store credit cards? And we still have to suffer? Ridiculous!

[Winnie Roybal]

My husband and I have been one of the many that have fallen on hard times. Layed off and lost our home, etc. Neither of us have had a traffic ticket in over 20 years. We are very responsible and careful drivers. What does one have to do with the other. That is just nuts!!!

[jada3339]

no i do not think it is right at all to use your credit score for car insurance or a job its very unfair and i think it is discriminating..

[Alberta Guinther]

Completely unfair just another way to get more money out of people. I have heard that same arguement that the insurance board quoted from my ins. co. when I called a gentleman said they only checked the ins once every 3 years my husband and I 66 & 67 years old no tickets no accidents in over 10 years my husband only one ticket in his life. Lots of things can effect credit scores that have nothing to do with how we drive. Our credit scores are very good also.

[Leona Tennis]

It appears the government bailed out Insurance Companies and Banks, Now, the people that have worked all their life, still working, may be laid off, we are also paying the bill. The government has given money to everyone but the people paying the bills. I had a poor credit score after my husband left me, insurance did not go up, why now. With all the houses in foreclosure in NV, the insurance companies are going to make a killing. I cannt be without insurance because I have a loan.

Why cant the people paying the bills get a break.

[Carolyn Gum]

No it is not fair to use credit scores for insurance rates. It should only be on your driving record only. It is mandatory by law that you have insurance. I found ways to always pay my insurance because the penalties were to high to pay if I got caught without insurance. And god forbid if you had an accident and it was determined to be your fault. I also think that an employer should not be using your credit score to determine if you should be hired or not. The only thing they should look at is your employment history and qualifications for the job. There are too many situations such as divorce and identity theft that can affect your credit history.

[Leona Tennis]

Hello:

I am 72 years old, worked all my llife, retired in 04. Ex left me with a house we purchased 9 months after I left my government job. Now, I am going to have to relocate, move in with my daughter because I can no longer pay for my house, along with the upkeep. I had to purchased a new car because of an accident in 08. I have AARP (Hartford), they claim they cannot cancel you, but my insurance had doubled. I have never hear of this, I had bad credit when my husband left me, because he had purchased a truck using my credit and they would not take me off of the contract, even though the decree stated that he was responsible. Now, my car insurance had doubled and I cannot get any insurance from any other company because of an accident. I am going to have to sell my car and drive a clunker because I can no longer afford insurance on my car. We should all write our congressman and AARP, it is not fair. I sent letters to Reid, Ensign and Berkley.

[S. Yach]

No, it is absolutely unfair. If I don't pay my Macys bill on time, I am NOT more likely to crash my car. This kind of reasoning is totally ridiculous, and I cannot believe that man actually answered Darcy Spears that way.

I don't think I should have to ask my insurance company to help me due to extraordinary circumstances. The current economic condition of Nevada does not make my condition extraordinary. It's ordinary. I have a perfect record except for one accident last year in which the policeman chose to not cite me. I have no tickets at all in 23 years here. My new premium has risen by $60, from 720 to 780 for this period. My credit has dropped during the last 6 months. It was very good for the past 22 years until this year.

I think the Dept of Insur. in NV should outlaw this criteria.

[Anita]

I don't think our credit score should be anyone's business but our own. I may have bad credit, but i've only been pulled over once in 20 years and have NEVER been in an accident. Our insurance rates are already high because we live off Boulder Highway....all those bad driver already make them high.It's just another company that wants to take consumers money...it should be illegal.

[Randy]

NOT Fair. Due to a divorce and some poor investment choices, I have totally lousy credit, but I have not had a ticket in well over 20 years. If a person is late with their premiums or has racked up a bunch of points on their license, *then* charge them more