Our weekly mail packet included our auto/rv insurance policies for this year along with the bill. We were pleased to see that the rate had gone done somewhat, especially considering that I had gotten a couple new quotes from other insurance companies and our current company was the lowest rate even at the former price.
What upset us, however, was the letter the insurance company sent along with our policies and bill, telling us that while we had received a discounted rate, we could have had an even cheaper rate. The letter went on to inform us that based on a credit report by Experian, our insurer had discovered three things:
1. Denny had never had a loan before the age of 25.
2. We have not had an automobile loan in several years.
3. We only carry one loan currently.
It seems that based on a totally arbitrary system of credit and loan histories insurance companies and a private firm have developed models of insurability that rate your driving ability and claim rates. You can have good credit, you can have a spotless driving record, but if you don't match the criteria of these insurance models you can pay more for your coverage than someone who carries a lot of debt.
I called the credit section of our insurer and spoke with a very nice young woman who explained the system to me, thanked me for listening courteously, but was adamant that our spotless driving record and credit history wasn't as important a factor in determining our chances of accidents and tendency to make a claim as the fact that we weren't heavily in debt. She told us if Denny could remember a credit card or loan taken out before he was 25 that would count heavily towards a further reduction in our rating. We can't do anything about the fact that we paid cash for our truck and haven't had a car loan in over ten years and it seems that the insurance companies want you to be carrying five loans to be considered an excellent driving risk. Not credit card debt, but actual loans for cars, rvs, boats, tuition, home improvements, whatever. We're higher risk because Denny didn't have loans at a young age, because we paid cash for our truck and because we only have the rv loan.
And you know what? Your insurance company is doing it to you, too.
2 comments:
This is unbelievable and would have me mad as well.
Their rationale is amazing. Who thinks up these things? Is there a governing body in the U.S. like we have the Insurance Bureau of Canada in Canada. That is screwy reasoning!
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