Auto Insurance, Credit Ratings and Progressive Insurance

[JasonD]

Intro
Well...I got popped by the "credit rating results in higher auto insurance fees" scam.

Part I - The Rant
They say that "studies" show that people with less than perfect credit are a greater risk on the road. I call that discrimination. I would love to see someone prove that because I had some credit card problems a few years ago, it makes me a bad driver. I would LOVE to see them prove that considering that I have had a perfect driving record for the past 7 years, and only one ticket in the past 12 years. Suddenly, I am a bad driver NOT based on my driving record but based on something that has NOTHING to do with my driving ability? I am 31 years old with a perfect driving record and my wife is 26 also with a perfect driving record. It is not like I am 19 with 6 points. I may not know muich about this, but based on what I do know, there is no reasoning behind that. It seems to me is is just another reason to suck more people dry. Anyone know of there is an active fight against this credit report/insurance crap that I can join up with?

Part II - The Scam
So needless to say, yesterday I recevied my insurance bill (from Michigan Millers Insurance) for the next 6 months and saw the rates double based on their flimsy reasoning, I lost my lid. My credit is not "bad" but it is not perfect. I think with credit scores an 8 is perfect and I think I have a 6.0 or something like that.

I have gone through the same broker for the past 5-6 years. He is a GOOD guy, never steered me wrong. I would love to stay with him as he has always taken great care of my family when it comes to insurance. Still, for the sake of argument and comparison, I started calling around. GMAC was more, I have heard nasty things about Geico. I called Progressive and the rates were DAMN good. They said my credit wasn't bad at all. Interesting, isn't it?

Screw Michigan Millers Insurance. Regardless, we will not be sticking with them. What a scam.

Part III - The Decision
We called my broker today and he said that us telling him about our ridiculous rate increase was the first time he had heard about our policy going south. He said he is a broker for Progressive and he will also check around to see what else he can find for us, so we should be able to stick with him as our broker.

So...has anyone gone with Progressive? I am sure there are horror stories for every company out there, but hopefully there will be some good stories as well as I may go with them unless my broker can get a better price through another.

Also...anyone ever use Hagerty? They insure collector cars, hot rods, pleasure cars, etc. I think the mileage per year limit is pretty low, though.

Most will agree insurance sucks and is a big screw job, just like anyone else, I want to get screwed as little as possible. Only with insurance and taxes can you say that and feel okay about about it.

Your thoughts are welcome.

 

[Kevin Turch]

Wow Jason that really sucks, I had no idea ins companys checked credit, mine didnt, im with allstate and love them. I checked around also, just to get some other rates and believe it or not progressive was alot more than any of the others i checked. I do hear Grundy is good also for classic insurance as with haggerty.

Good luck

Kevin

 

[Reginald West]

I have used Haggerty for years and I think( but I won't swear to it ) that they dropped there mileage restriction a few years back.

REG

 

[striker_29]

I have Progressive coverage on both my vehicles, one being the Gn. I have never had any problems with them, or had to file a claim. My previous GN was totalled out when some guy rear ended me a couple of years ago. That car was covered with Progressive as well, and I had a good experience with them. They sent an adjuster out immediately to check out my car, I happened to be at the body shop when the guy came by. He commented on what a valuable/ nice car it was, and he was sitting in his progreesive suv with his laptop trying to find replacement parts so he could possibly save the car. There was too much damage, but they immediately offered to take care of me and settle with the other insurer later, even though it was the other guys fault. I declined, but was well pleased with their desire to take care of me, and my rates dropped the next year even after getting a speeding ticket during that time. I'm not in the habit of singing praises to insurance companies, but so far Progressive is pretty ok in my book.

 

[blackshoebox]

Insurance companys suck...

...Sorry to here about your problems with insurance Jason. I would look into collectors insurance depending on how much you drive your GN. I just got Grundy, and its pretty nice. Unlimited millage, one annual fee of 350 a year for me, and you can state the value you want the car insured for. The only downfall, is a garage is required to obtain the insurance. Other then that, its great.

...As for progessive, I have heard good things about them, although I have never used them presonally. Allstate was good to me for a while, but their rates got a way out of hand, so I had to make a change. Overall, I think the Insurance companies need to be regulated by the state, or the US government all together. They raise peoples rates for the most rediculous reasons, and get away with it, because there is no middle man, to regulate what they(the issuer) can do to the consumer(me and you). The credit rating thing is a recent thing I have heard of, and it is absolutely rediculous. It is most definantly discrimination. Sounds like some of the Wealthy are trying to figure out another way to keep the pockets lined with money, while the middle and lower class struggle to stay above water. Really sad if you ask me.

I'm done ranting, good luck.

-Alex

 

[GN One Day...]

Okay, I'll play Devil's Advocate. DO NOT interpret this as a remark on Jason's credit, if he's in the 600-700 range, he's probably on level footing with most out there.

Credit is a big deal all over the place now. Potential employers will pull it, insurance, obviously loans. As for insurance, it's another monthly debt to be paid in a timely manner, so I can see the significance. As with a loan, if it isn't paid, it costs them money. Especially if there's a claim during the questionable interim between late payments, but before a policy is cancelled. However, most insurance companies collect a reserve month up front if you pay monthly and mail the payment yourself. If it's on auto draft, seems to me they should lower the premium due to reduced risk.
On one hand, you don't want to be charged more due to credit (not that Jason's sounds risky). But, if you have an 800 credit score, you have proven yourself to be very conscientious. Wouldn't you think you deserve to have a lower interest rate etc. than the guy that doesn't pay on time? If not, what's the motivation to pay as agreed?
Mainly, if Jason's credit is proven to be rehabilitated, it's probably just an easy ploy to make more money off of him. If it makes you feel better, the big insurance co's won't even write new homeowner policies in MS (State Farm, Allstate, Shelter). They give the whole state a "bad credit rating" and cut us off. To me, that's discriminatory, but to them it's good business and minimizing the losses.
Ask Rogue Leader about Geico, doesn't he work there? Maybe he can shed some light.

 

[Two Lane]

ONE OF THE BEST KEPT SECRETS REGARDING INSURANCE

http://www.farmbureauinsurance-mi.com/pages/siteindx/indexcty.htm
*************************************************

Usually have an annual membership fee (25.00 avg.).

There are several other benefits with membership.

They are nationwide, with state-by-state enrollments, agents, & offices.

Exceptional rates for home insurance also.

============================================

We have never been able to find a better package of extraordinary rates, service, & insurance products.

Wonderful people to deal with, in good times & bad.

One agent at the office you select becomes Y-O-U-R
personal representative---no broker middleman, handing your file off to an outside company who doesn't know you from Adam's housecat.

You pick up the phone whenever you wish and speak directly with a person, on a personal level.

HTH

 

[Rollin]

Jason:

RANT 1

Anyone know of there is an active fight against this credit report/insurance crap that I can join up with?

I've been bit by the same bug. The way they base your rates is by credit score not credit rating. A credit score is different than a credit rating used by banks and other lending agencies.
Banks consider income, assets, existing debt and credit history when deciding whether to approve loans.
What the insurance company tells you is that a credit score, is a measure of a customers potential risk to file claims, not their credit-worthiness.(yeah right) They use the score, along with driving records, age, type of vehicle insured and claims histories, to set rates.
HOWEVER,
there is no uniform set of information used by all insurance companies to determine credit scores. Generally, information such as bankruptcies, bills turned over to collection agencies, payment history and age of accounts is used. In addition, the number of credit accounts opened recently, the types of credit accounts held and inquires about a customers' credit record can be factored in.
So, for instance, if a person looks at loans from half a dozen lending agencies for a new car, six inquiries will show up on their credit report. This means that I now pay more for the insurance to cover the same three vehicle plus the new truck becasue I opted to shop around first and had some minor credit issues in the past. I think this whole credit scoring issue needs to be rendered null and void.
As far as what you can do or get on board with. Your previous State Attonery General now Governor is already on the case. Here's what she did last year: http://www.carlaw.net/carlaw/october2002/ss-mi01.html
And heres what happened:
http://www.housingchoice.org/news stories/12192002.html

Keep abreast of what your Legislation is doing contact your rep see what you can do.

Geoff

 

[gnXfan]

Well my credit score is an 8. I've been with liberty mutual for 16 years. No claims, tix, or anything.

My rates are up 50% over last year. 50 percent.

 

[Little6pack]

I have progressive for 2 daliy drivers for 10 years

In the beginning they tend to snag you with GOOD LOW RATE$.
Then as time goes by they PROGRESSIVLY GO UP

I am paying more now that when my cars were new.

Part of the REASON is MY area is getting bombarded with people moving up from MASS.. OR
They vist our TAX free STATE to buy stuff & cause accidents from not knowing how to drive or the excitment of saving a buck or two.

One guy tagged my Wife. He made a lane change with no signal.
Police report put him at 100 percent fault. He never contacted his insurance company because he had other accidents. SO we called Progressive to help us. They were very helpfull to put the squeeze on him & his insurer.

 

[GNSCOTT]

Jason, you had to have given them permission to look at your credit report. I would refuse this, because your credit score goes down for a while everytime someone looks at it.


I have a bigger beef with insurance companies. One nite, someone hit me, completely their fault. I won a small settelment for personal injury (like 5 grand) and they paid to fix my car. I called progressive for a quote on my old WS6 and they quoted me @ $990 for 6 months, so I told them i would drop Geico (whom I had since I was 18, 12 years) and go with them. They then came back on the phone and told me that they had made a mistake, and because I filed a claim AGAINST someone, my new premium was $1300 for 6 months. I now have no heart for insurance companies, and will make sure my back is 100% before I stop going to the chiropractor. I stopped going even though my back still hurt because it was in my mind a scam. They never asked how my back felt, and their "theropy" felt good for about an hour after I left. I actually felt bad for the insurance company I was sueing and stopped going.

I did nothing wrong, and I have to pay for it..ITS BS!!!

 

[Two Lane]

TTT

^^^^^^^^^^^^^^^^

 

[Joe 1320]

. Wouldn't you think you deserve to have a lower interest rate etc. than the guy that doesn't pay on time? If not, what's the motivation to pay as agreed?
[/B]

No way. Don't think for a minute that the insurance compaies extend any form of credit. They get all their money up front before they extend coverage. Your bill due date is typically 30 days before the cancellation date to where your previous payment runs out. That way, even if late, you have still previously paid up to the cancellation date. I'll repeat it again..... There is no way and insurance company extends credit. Credit score should not be used as a basis for insurance rate.

This is a real hornet's nest in Florida as insurance is mandatory. No insurance, you are reported to the DMV and your license is suspended even without any citations or violations. The insurance companies have you by the "you know whats".

 

[Rogue Leader]

I work for GEICO

Ok let me jump in here cause theres some common misconceptions.. (Im an Agent for GEICO)

Firstly not all insurance companies run credit in all states, They have to be filed with that state to be able to do it. GEICO uses credit in NY, while in all other new england states it does not... Some other companies dont run credit in NY but do run in other states, its state and company specific. I dont know much about Michigan, but its possible we dont use it there..

Secondly.. The insurance company CANNOT run credit on you if you dont want them to. when youre applying they will "sort of" ask you (more like tell you) they are going to do it... you have to say NO! and they wont do it.

Third... Credit scores by insurance companies DO NOT affect your credit rating... you could order your credit score all day long and it wont drop it 1 point. If it shows on your credit report it shows as an "Insurance Inquiry".

Fourth... credit score really does have nothing to do with your driving... it has to do with your responsibility and ability to pay for your insurance policy. The insurance company is hoping you dont crash (contrary to most peoples belief) they just want you to be a good policyholder and pay us every month and never have any problems. Realize we are here for one reason... to make money, not provide a public service (or some people think we are even a charity!!). STATISTICS show (and please dont take this as derogatory against anyone here) that people with lower scores dont pay on time, dont pay at all, etc so on and so forth... And you know what, looking back at old policies I can tell who has a policy that very likely was affected by credit and I can see things on there like their policy was dropped for non payment a few times, stuff like that. Like i said its not EVERYONE but we also dont have time to research your financial history and see that it was just a couple stupid little things that killed your credit score. So we have to treat everyone with the same "problem" equally.

My advice to you jason is to drop them like a hot potato because the fact they ran credit on you now is pretty shady. For example with GEICO if you had started your policy before we ran credit, we would never bother you about it, same if you refused credit, we have no reason to bother you then (unless you get dropped or something and we have to re-issue) but if your policy is never dropped or anything then it stays the same. Just because they are an insurance company doesnt mean they are honest...

As for progressive, yeah I know im biased here but they are the WORST insurance company. They have pending class action lawsuits for redlining (they decided they dont want to insure in brooklyn NY anymore for a while which is about as illegal as a 1/2 lb bag of crack), and also bait and switch techniques. I cant tell you how many "6 month policyholders" from Progressive call me up screaming because after the great rate they got for the first 6 months there it doubled afterwards! Plus their legal department sucks, they arent too good with winning cases for their policyholders, and when they dont they put the accident against you and jack your rates!! Please if youre gonna change dont change to them.

Without sounding too much like a commercial, theres a LOT of rumors about GEICO out there but we have 5,000,000 (just hit that in march) policyholders across the US, we are always available 24/7 for sales, service, claims etc. From personal experience I got hit while parked recently by someone with GEICO and the claim was handled blindingly fast (unlike Allstate who was like pulling teeth when their policyholder rearended me!). You can and will get good rates there and as long as you stay clean your rates will stay very stable, even go down! That said not everyone is the same I get people every day that say "my buddy got a rate half as much!!!" well everyone is different and theres so many factors that go into our underwriting that no 2 people are gonna get the same rate. GEICO does have the most stable rates of ANY insurance company especially in the northeast, and also GEICO is the highest rated of the "major" insurance companies in terms of customer service and satisfaction (with more policyholders theres more people to piss off so smaller companies do have an advantage).

So... take that fwiw, let me know if ya got more questions, Im happy to help...

 

[GN One Day...]

Re: I work for GEICO

Originally posted by Rogue Leader
Fourth... credit score really does have nothing to do with your driving... it has to do with your responsibility and ability to pay for your insurance policy. The insurance company is hoping you dont crash (contrary to most peoples belief) they just want you to be a good policyholder and pay us every month and never have any problems. Realize we are here for one reason... to make money, not provide a public service (or some people think we are even a charity!!). STATISTICS show (and please dont take this as derogatory against anyone here) that people with lower scores dont pay on time, dont pay at all, etc so on and so forth... And you know what, looking back at old policies I can tell who has a policy that very likely was affected by credit and I can see things on there like their policy was dropped for non payment a few times, stuff like that. Like i said its not EVERYONE but we also dont have time to research your financial history and see that it was just a couple stupid little things that killed your credit score. So we have to treat everyone with the same "problem" equally.

Exactly my point. If you show on your credit that you don't pay on time for your secured debts, why would they think that you're more likely to pay for this bill which is for a service that is completely intangible? Pulling the report has nothing to do with driving risk, but everything to do with billing. An insurance company doesn't want someone who constantly has to be worked for payment (costs money), lets the insurance lapse etc. People getting into accidents after they let the insurance lapse, their own fault, will probably sue if coverage is denied a claim within a few days of that lapse. That's just how people are. No, they aren't extending credit, but it is a great tool for checking how responsible a person is paying their monthly bills. Credit reports have nothing to do with talking on the phone, but cell phone companies pull the report for that service too. You do pay after the fact with a phone, but it's still not reported on credit unless you have a charge off. It all boils down to responsibility, stability and willingness to pay. Employers will often pull a credit report on you too as a reflection of your sense of responsibility. I'd rather hire a guy with a 750 score who always pays on time than the guy that has a 520 with charge off's, unpaid taxes, late payments scattered around the last 5 years...doesn't make him a bad person, but it does reflect risk involved. With insurance, one guy is going to pay on time, not cost extra money for collection, less exposure for litigation etc. so yes, that guy deserves a better rate, all other things being equal. When billing is involved, there is more to it than meets the eye.

 

[SuperSix]

My family and I have been w/Progressive for years, and have no complaints. We average 5 cars with them at any given time.

The wife's I30 was t-boned, and Progressive paid quickly. Since we used a recommended repair shop, the repairs were guaranteed, and we had to take the car back because the first shop cut some corners, they recommended a new shop (Gee, wonder why the initial shop isn't "recommended" anymore) and the repairs were done quickly, free, and they paid for a rental.

Nice deal!

 

[whitehot84]

A year or so ago I decided to see if I could save some money on my insurance and my stepson was coming of driving age too, so I got on Progressives' web-site. They quoted me a rate and asked if I would like a rate for two of their competitors. Of course I would. It turned out that the rate for Farm Burea was less than half of Progressives. I checked it out and was pleased to find that this was in fact true. I signed on and have been more than satisfied with the company. They were also the cheapest for the new teenage driver added to our policy. They also have a stated value program for custom and collector cars.

 

[Two Lane]

231% AGREEMENT!

Originally posted by whitehot84


It turned out that the rate for Farm Bureau was less than half of Progressives.

I checked it out and was pleased to find that this was in fact true.

I signed on and have been more than satisfied with the company.

They were also the cheapest for the new teenage driver added to our policy.

They also have a stated value program for custom and collector cars.

Great people, policies, product packages, benefits & rates!

http://www.farmbureauinsurance-mi.com/pages/siteindx/indexcty.htm

HTH

 

[GNSCOTT]

Rogue Leader, can you tell me why my insurance goes up if soemeone hits me and I file a claim against their insurance company???

 

[whitehot84]

They feel that because you were in an accident, even though it was not your fault, you are somehow a magnet. So even though you just happened to be at the right place at the wrong time it somehow in their eyes makes you a risk. Duh.