I'm mad as h**l and I'm not going to take it anymore...?

Question

First of all, I would like to start out by saying that I am being phucked up the old p**p chute by my car insurance company.

Question #1: Am I the only one who thinks it's ludicrous that insurance companies are now using your credit report to calculate your rates instead of using, oh, I don't know...YOUR DRIVING RECORD! I have never had an accident or any major let alone minor traffic violations in the history of my licensure (if that's a word; it must be because the spell checker didn't pop up). I have been driving for almost twenty years. I was paying about $75 a month for the last four years with the company and now it has just gone up to $110 based strictly on information in my credit report. An insurance company told me flat out that they do this because in their experience bad (or in my case, mostly nonexistent) credit equals bad driving. WTF?! Yeah, I have proven that theory with flying colors *pause while I bang my head against my keyboard* Ok, now that I have gotten that rant out of the way...

Question #2: Does anyone know of a way that I can regain and keep my good insurance rates short of taking on more credit, and subsequently, debt? I have shopped around for quotes, but they all tell me the same thing. Is it hopeless? Should I just go out and buy some more KY Jelly with which to tolerate some more of this here s******g?

Answer 1

It varies by state, but credit is considered.  You don't have to "take on debt" to build your credit history.  Get a credit card, make a small charge or two each month and pay it off when the bill comes.  That payment history will gradually increase your credit score without going "into debt."

Answer 2

1. I do think it's ridiculous, but it's allowed, and this varies by state law. They have claimed that poor credit ratings are more risky in the terms of loss, but I don't reall know that it's been solidly substantiated. The states that allow this have wimps or bribe-takers for insurance commissioners, in my opinion. Now that I've gotten my rant out of the way ... =)

2. I agree that all you can do is shop rates. How long had you had this insurance company? That's pretty jacked up that they charged you more, even though your experience on record was zero loss. My credit rating has fluctuated over the years, and my company has never changed my rate just because of that, with me having already been a customer. That's just wrong. Try esurance.com and shop the premium rates. Good luck.

Answer 3

What they can and will use varies by state.  Some states allow only driving point and even allow age to be considered.  The best thing for you to do is shop your insurance.  You may find better rates at another company.  It's all very competitive.

Answer 4

You don't want to hear it, but there is clearly a connection between bad credit record (failure to pay debts) and insurance claims history.  (It is also known as morale hazard).  Some aspect seem less fair, however.  Example: if you have bad credit due to illness and medical bills (defaults) then it seems less fair.  If you just charged up a lot of debt and defaulted, then you don't seem as responsible. I do agree, however, that the common standard in most states that credit can only be considered as one of several factors (driving record, age, etc.) in setting rates.  

The best thing you can probably do is use legal strategies to improve your credit.  Also, not all companies use credit scoring the same way.  Typically, getting quotes from various auto insurers does not hurt you in any way so shop around.  You may well find an insurer that emphasizes credit less than your current carrier and is a better deal overall.  Just make sure to stay with a reputable carrier (A- Standard and Poors rating or better) so you don't find that you have paid for protection that you'll never get.  Good luck.

Answer 5

Wow Ghost I didn't  know that, really, agree with you that does suck!  It seems that these companies not only that one  as I just found out from reading your post, but others are raising rates, because one excuse or another!

Maybe another card is the answer and you can put the KY on that one and pay it off every month!  Hoping a little humor will cheer you up some!!  Cheers!!

Answer 6

1.  No, you're not the only one who thinks it's silly.  HOWEVER, the numbers are VALID.  For whatever reason, people with credit scores under 600 have more claims, and higher claims, than people with credit scores over 700.  Why?  Who knows.  Why do 16 year olds have more accidents?  THEY have clean driving records, also.  It doesn't matter WHY.  What matters is, the relationship is REAL.

2.  In CA, at this time, credit is NOT a rating factor.  I've heard this is going to change, so by the time you get out there, it may or may not still be valid.  Additionally, if your bad credit is due to something like a serious medical issue, like cancer or a preemie baby, or a divorce, or something like that, TRAVELERS INSURANCE will take a more detailed look at your credit, and manually underwrite you.  SO.  Go to www.travelers.com, and find a local agent, to see if they can help you out.  I don't think they're the ONLY company out there that will give "special cosideration", but they are the only one that I know of.

Lastly, and you'll hate this . . . work your way out of debt.  I really like the Dave Ramsey program - www.daveramsey.com

Answer 7

I have heard that there are insurance companies out there that don't factor your credit into their rate calculations but I don't know who they are.  While I don't approve of this practice, these days,good credit is essential.  You don't need to take on more debt.  Get a card and use it each month to buy things you would buy anyway.  Pay it off every month on time.  Your credit score improves and you're not in debt.