I got a hard inquiry from All State insurance when I signed up with them for car insurance. Do all insurance companies pull hard inquiries? I just saw on another thread that Amica Mutual pulled a soft one for Matt. Has your insurance company pulled a hard one?
Progressive Insurance pulled a hard one from me when I signed up and then again in 6 months when I renewed. I plan to dispute it.
I went to my insurance agent the other day just to inquire about a rate reduction since I paid off a car, and specifically asked that no credit check be done. Sure enough, my experian report shows that Progressive pulled a hard inquiry that afternoon. I had a request to remove an inquiry to Progressive sitting in my pocketbook from a year ago that they had no reason to pull at the time. Now, I am really annoyed, and want to figure out stronger language to use! My experian points dropped 12 points from that.
FARMERS PULLED A "HARD" ONE ON ME... I disputed it...(did not apply for a loan or credit card~~~FRADULANT INQUIRY)... THEIR ANSWER~~~"PERMISSABLE PURPOSE".
THEIR ANSWER~~~"PERMISSABLE PURPOSE". That is exactly what AllState says - Permissable Purpose. 1. Insurance is not credit. 2. If they are pulling a hard one and for some reason "treating" a policy over its term as a credit/loan, then they should also report the insurance payments to the CRA's. This is NOT FAIR to the consumers. Besides, this should be against the law.... Any insurance law savvy folks want to jump in here...?
They CAN do a "HARD" if they give me a credit card or loan!!! I PAY IN FULL, before coverage starts...so they are NOT providing me any credit!!!
I called 800 number and advised that I wanted quote with CR pull. Amica pulled a hard inquiry. Even after they had assured me that they would not, that it was not necessary. I disputed it with Equifax by phone as no permissable purposed and it was deleted about 2 weeks later. Farmers already had RENEWED insurance for auto with renewal dates of 5/24-11/24/2002, renewal policy in hand and already paid for. I was querying with Farmers agent whether that rate was really the best they could do, advised that I was gathering rates from other companies, AND ADVISED THAT I DID NOT WANT A HARD INQUIRY PULLED. Sure enuf, hard inquiry on TU, and a call from agent that sorry, but my rate is best they can offer. I sent letter to Farmers last week asking for deletion, no permissable purpose. Waiting on answer. And I cancelled my Farmers Auto and am under policy with Geico. <<next insurance project;house insurance !! >>>
Don't shoot me. But I'm a liscensed insurance agent and wor kfor a large insurance company (not selling anymore however). This is a VERY hot topic within the industry. I don't agree with it, but the insurance industries argument is that credit is the NUMBER ONE predictor of future losses, more so than driving history and past losses. Anyways, many companies are pulling credit now for HO and ATO insurance and expect more to do so in the future. There are a variety of movements within the state legislatures to fight this. Let's hope they are successfull!
The agent I spoke with the other day said that there is a correlation between bad credit and claims. I have never had a claim, pay my 6 months in full upfront, and I have had bad credit in the past. How is that the norm? I totally disagree with it, but since they can pull your report, they will.
I HAVE ONE TICKET 1983 7+ MPH...NO CLAIMS, EVER, HOUSE OR CARS!!! I HAVE GREAT CREDIT SINCE 1978...I JUST DON'T WANT ANY INQUIRES UNLESS THEY ARE GOING TO GIVE ME CREDIT!!!!!!!!!
Actually. There is a flip side to this as well. Many companies DO reward for good credit scores with various discounts and lower premiums. So while many here (included myself) will get penalized because of lower credit scores, those of you with higher scores would therefore see lower rates. Again..I don't neccessarily agree with the argument, but that's the stance the industry is taking.
The fact that insurance companies are now pulling credit reports is horrible. The very people with the most to lose will get higher insurance rates or perhaps even turned down altogether. Sound familiar? Someone who has lost their credit doesn't need to be paying more car insurance. What does your freaking visa card have to do with the way you drive your car anyway? This is yet another way that corporate, greedy America is tightening the screws on our lives and gaining even more control. I don't want to sound paranoid here, but every time I read something new these days it's all about the average guy losing more and more of his privacy. Where are we going here? Next, doctors and hospitals will do credit checks before they decide to treat you in emergency for a heart attack. It sounds ridiculous but just a couple of months ago, it would have sounded ridiculous for someone to say that Allstate was going to check my credit rating. For what, I would have asked? When I don't make my monthly payment, they cancel my insurance. They have absolutely no risk of losing one penny. The financial industry and big business is reminding me more and more of Orsen Wells.
I find the argument made by the insurnace companies that credit is the best predictor of risk to be highly suspect, especially when the industry refuses to release detailed analyses of the supposed correlation, branding the data as proprietary. We all know that: 1. a high percentage of credit reports contain bona fide errors; 2. the reporting system has almost no checks and balances, allowing unscrupulous CAs and creditors to duplicate accounts, re-age accounts, and commit other unlawful acts; 3. risk scores, both for insurance and credit, vary wildly even for people who present almost identical profiles. 4. scores can change substantially in a short period of time. Does that fact that I got Gulf State to remove that 5-year-old collection account that was actually for someone else makes me less likely to drive my Taurus into a wall? I'd like to see them prove it. Using that type of information in the place of accident reports, driving records, and the like, which are usually quite accurate and verifiable and are clearly correlated to driving behavior, seems preposterous. The only explanation is a desire to enhance profit using a device that most consumers (those who aren't CreditNetters) will feel intimidated or unable to change. It's just someone else using the classic "it's not us, it's them" excuse even though "us" will be making all the money while "we" pay for it. It will clearly take legislative action to limit this abuse. Sorry for the long rant; but I find this issue infuriating. Greg
Great points Greg. I'm going to print your response and show it too many of my colleagues who believe the "company line" that credit is a great predictor of future loss.
My brother had one accident...(somebody totaled his truck while running from 10-20 POLICE cars~~~stuck in traffic...no where to go)...NO TICKETS, NO ACCIDENTS...BUT because his EX messed up his credit HE HAS TO PAY DEARLY FOR INSURANCE!!!
wow George, for the first time not in all caps!!! - I had to say that Anyway, I am getting the exact purpose of this thread fulfilled, thanks to touchdown for adding the valued information based on his insurance industry knowledge. Now we are beyond the point (which was what insurance companies pull hard vs soft etc.) and are discussing whether the insurance companies should check credit before quoting the policy. I am completely FOR the idea of not checking credit and not correlating credit with driving behavior. So please do not get me wrong. However, I was thinking from another point of view. I am not in insurance industry. Just common sense tells me that the profitable customers for insurance companies are who: a) pay the bills - renews the policy - again and again b) have no claims Now we all know how insurance companies mint money but I would assume there are two ways insurance companies lose money: 1. claims (of all kinds) 2. cancelled policies Now, granted the errors in the credit files and defective scoring algos and all that, there is still by and large some sort of correlation between low scores and bad payment history. Meaning, may be a 625 is not necessarily better than a 575 or even 550, but I would say a 750 is "most likely" better than a 500. Please bear with me, while I make these examples. So my point is that may be insurance companies are looking at lower risk of cancelled policies (due to bad payment history), even though you may have had a good driving record, because that eventually is a loss for them. I would like to get touchdown's (since he is in insurance industry) view on this. For all others, this is not an arguement in favor of insurance companies ( I hate them as much for pulling all those hard ones... specially when they say permissible purpose). Darn, I am paying more for my policy (probably) because of two derogs I have.
Although price shoppers and canceled policies do cost an insurance company money in processing, underwriting, reissuing policies, they are a fraction of the cost of what a $500,000 liability claim will cost them. So I would guess the main rationale for pulling credit is NOT to check on the ability to pay bills. Actually one of my co-workers was one of the first pioneers of the Credit Based scoring model as it applies to homeowners insurance. He developed a comprehensive model at another company he worked at. He's out on vacation until next week, but when he get's back, I'm going to talk with him and I'll report back his thoughts, maybe I'll even have him come here (with his armor on) and argue his points. TD
Touchdown, that would be fantastic! Although many (most?) on this board consider credit based insurance rating to be unfair and illogical, I think everyone would like to hear from someone who has actually designed a scoring model. Getting information direct from the source, whether we will agree with his reasoning or not, would be a much higher quality experience than having to wade through the propaganda put forth by Fair Isaac, CA's and insurance companies. Thanks for offering to put this information on the board, I'll be looking forward to it.
