Called yesterday to request a rate quote from an insurance company. They ran an Experian report and it dropped my CreditExpert score three points -- from 717 to 714. This is so annoying. It wasn't as though I was applying for credit. Moreover, the insurance company's inquiry appears on the report as a hard inquiry, which could possibly cost me an approval. I now have two hard inquiries in the past six months.
You are applying for creditl if you asking the insurance to extend a policy for (6/12) month term with payments. You can specifically say "I would like to prepay the entire policy at once, and don't want you to pull an inquiry". They will not pull one then.
Sam, Your statement is not entirely true. I told State Farm that, and they still pulled an inquiry (hard). I live in NYS and they are allowed by law to pull a hard inquiry, even if you are paying the premium up front. (Which I do.) If you live in a state like NY, it doesn't matter what you tell them, they will pull it anyways. In states with laws like California, they could do as you ask.
True, every state is different. Last time i checked, where i live in georgia, they cannot base your rate on your credit. I hear some other states can base your rate on your credit instead of your driving record. Isn't that something?? If you have bad credit you must be a bad driver!! I'd be pissed if anyone tried that. Progressive, they pull experian, for adults over the age of 21. (Note they do not pull credit on 18-21 year olds in georgia, you automatically are approved for payments..)
Sam, Maybe Breeze can comment better than I, but here goes....During a conversation with an AMEX Auto Insurance rep, I told her that my credit has nothing to do with my driving. Unlike my credit, I have never had a claim or an accident, and my record has been clean since 1997 (violations). I asked her how my poor credit related to my great driving record. She stated that there have been studies done that show a correlation between poor credit and claims. The poorer the credit, the more claims. I disagree with that, but since I live in NY, I don't have a choice. ALl auto insurers pull a credit history, claims history, and driving history, regardless if you pay the premium up front or do monthly payments. I hope that that makes it a little clearer for you.
Must be a NY thing. in georgia progressive only pullsa report when you authorize them to do so, you driving record is the only item that affects your rates. Thank god! I'd be broke if my credit reflected my rates.. Perhaps breeze can explain why Ny and Ga are different. Or perhaps not all insurance companies are the same. Btw, I was declined for "payments" by progressive with a 587 score, My gf who never had credit, was accepted, without inquiry for 12 month installment payments. I don't believe anyone here would know HOW mad i was. I had been paying on payments for over 2 years with progressive with a 500's score, then bam, DENIED payments, all due at one time. I about flipped my lid. I had the policy drafted to my gf, and because she is under 21, they said they do not pull credit, and automatically qualified for 12 payments. I checked her report, and sure enough they did not pull a credit report.. These insurance companies are truly whacky!!!
What's really annoying about this situation is that all he did was ask for a quote! If he likes the quote and wants to pay over time, then it makes sense for them to pull a credit inquiry. But those are two big IF's ! I asked for an online quote from progressive in april, got 2.5 X what I was already paying, and never thought about them again, until I pulled my experian report last month. I'm disputing the inquiry now (Its been three weeks, still no word). Maurice, I think you should also dispute this. -Roman
Dispute the inquiry on-line with Experian. I have gotten EVERY insurance inquiry deleted by this method from Experian. jmart
FYI, I asked only for a quote; I did not ask for installment payments. The quoted rate was $307 higher for a six-month policy than I was already paying. So, at the end of the day, an overpriced company with which I can't do business dinged my credit file for three points. That's baloney. They should pull a soft inquiry, or the algorithm should ignore insurance inquiries for scoring purposes. I've already disputed it online with Experian. At the same time, I disputed two older inquiries from a car dealer that I gave permission to pull my credit once but pulled it three times. Thanks, all, for your input. Maurice
Word There are only a few states that currently restrict the use of credit reports for auto insurance underwriting. Here is a breakdown by state of current regulations: http://www.insure.com/gen/creditreports.html Some other interesting articles I found while getting this: Some companies extending payment deadlines due to the WTC disaster: http://www.insure.com/business/premiumdeadlines901.html Forida is holding public hearings about the use of credit reports in property and casualty insurance underwriting - get out and let them know what you think! Florida leads the way in insurance consumer issues - other states will follow what they do. http://www.insure.com/states/fl/auto/creditreporttaskforce901.html Will your premiums go up as a result of WTC disaster claims? the answer is "not likely" just like I said <smug smile> http://www.insure.com/life/terroristeffects901.html This site, http://www.insure.com is an excellent resource for your insurance questions if you would rather have the facts as opposed to specualtion. Every state is different, every company is different. Because of this, what happens with one person will not necessarily happen with another.
DISPUTE...DISPUTE...DISPUTE...DISPUTE... I don't have credit with FARMER'S INSURANCE...I PAY IN FULL. They still do a "SOFT"...I DON'T LIKE THAT EITHER. I ALMOST CANCELLED AFTER 20+ YEARS WITH FARMERS, because they PULLED AFTER I TOLD THEM NOT TO!!! They don't need the SS# to "PULL"...A few years ago, they called and said they were "UPDATING" their records...they wanted SS#...I SAID NO!!!!!!!! I'M NOT APPLYING FOR CREDIT, I PAY IN FULL!!!!!!! I have ONE ticket 1982...No accidents, EVER, NO CLAIMS EVER!!! I HAVE VERY GOOD CREDIT...BUT I DON'T WANT THEM "NOSING"!!!
As a New York insurance agent, I can only speak, with some confidence, about that state. The pulling of ones credit has nothing to do with the offering of payment plans. As was stated earlier, the insurance companies insist that there is a correlation between claims and credit, and that one with bad credit not only poses a risk by being "careless" but also poses an increased risk of insurance fraud. Insurance companies will usually not admit to the latter but it is the more important consideration. For those looking for insurance in New York, my best advise is to seek a recommendation to a fairly large independent agent. If possible get recommended by someone who might be important to an agent. You will not believe how much more respect you will be afforded. Do not assume that by not giving your SS# that credit cannot be pulled. Ins. credit software only requires your drivers lic.#. Ask specifically if credit is a factor before you authorize the quote. Based on my experience, it will be in 90% of the cases.
If I was "LOOKING" for insurance, I would say UPFRONT... I AM WILLING TO PAY IN FULL. MY CREDIT REPORT HAS NOTHING TO DO WITH DRIVING, AND IF YOU PULL A CREDIT REPORT I WILL WALK!!! IF DRIVING HAS A CONNECTION TO A CREDIT REPORT...I WANT MY F.I.C.O. SCORE TO BE 845!!! (-5 POINTS FOR THE 7 MPH OVER TICKET I GOT ALMOST 20 YEARS AGO)!!!!
You got it George. If people would refuse to place their business with these companies, the companies would be forced to change their practices. As it is, the only other option is to go ahead and do business with them, and then complain about what they did. If you oppose this, vote with your feet, and go to an independent agent, tell them your concerns, and they can place you with a company that does not pull credit. If an agent tells you he cannot do that, go to another agent. The ones who say they cannot place you with a credit-report-free company just don't have one. Another agent will. The other thing you can do is let your state's insurance Dept. know your feelings. Most states are looking at this right now, and your input can have an effect on the outcome. Go to http://www.insure.com and select your state. You will see your state's insurance dept. in the links provided. Go there and tell them how you feel. There is no actuarial basis for using credit reports to underwrite property and casualty insurance.
I have had a perfect driving record for 36 years - not even a ticket. Which is a better way to assess the risk - my driving record or my credit?
Breeze, I agree with you. Why as consumers, don't we go elsewhere if a company is performing activities that we disapprove of (pulling our credit report for premium qualifications)? I have had Erie for seven years and they have never pulled an inquiry on me. But, I guarantee if they started I would walk. Your driving record has no bearing on your credit report. Dani
I agree, i also agree your sex should not have any bearing on your insurance. Even though us men drive better than women (okay just kidding!!!!!).. unfair..
It sucks for us, but the insurance companies are playing the statistics game. Women are safer drivers than men, statistically. People with higher credit are lower risk/safer than people with lower credit statistically. People over the age of 25 are statistically safer than people over 25. Statistically, those statements are true, and unfortunately our insurance premiums are going to be shaped by those factors. jmart
Actually, there is actuarial basis for the gender "discrimination." When there is an actuarial reason for including something in rating, and the law intervenes, the insurance companies just go to the higher rate. so for instance, when certain states decided that there should be no difference in life insurance rates for men and women (women pay less because they live longer) - insurance companies in those states just started charging women the men's rates. So it really hurt the consumers. If there is an actuarial basis, then you really shouldn't throw a consumer fit, because the companies will not lower their standards, they will even things out by raising them. But there is no actuarial basis for the use of credit reports in auto and homeowner's insurance rates.
