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Progressive Auto Insurance raised my premium 40% since I opened too many credit cards

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Old Sep 19, 12, 3:53 pm
  #46
 
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Originally Posted by SuperDudley View Post
Insurance company's perspective is that you are opening a number of credit cards because you are anticipating using them as a means for living within the next few months. People who rely heavily on their credit cards for living, instead of having cash in the bank, are more likely to file claims. They don't have the means necessary to handle losses out of pocket when the situation arises. That's also the reason why credit (insurance) scoring is a valid loss predictor.
Yes, that is a well known fact among us credit card churners.

I am specifically interested in whether people with experience in insurance interpret the paragraph below as stating that they are weighing more heavily the accounts opened in the last 6 months. Technically, every card a person has is listed on the credit report every month.

If all credit cards that are open are treated equally (with the exception of the most recently opened card listed in paragraph 2) that affects churning differently than if ALL accounts opened in the last 6 months are weighed more heavily than older accounts.

Originally Posted by jeanie View Post
"Number of Accounts Reported Within 6 Months - Industry research shows that consumers with a large number of reported accounts have more insurance losses. Our score considers the number of accounts reported by your creditors within the last 6 months. To improve this aspect of your score, open new accounts only when needed.
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Old Sep 19, 12, 4:20 pm
  #47
 
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I have Travelers and have not had a rate increase due to refinances and new cards
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Old Sep 20, 12, 1:00 am
  #48
 
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Sorry about this. The sudden increase seems absurd to me, really. Iíve been with The Hartford for about 12 years now and Iíve never had to face such a problem with them. I think itís time to switch. Why donít you contact The Hartford for an auto insurance quote? I donít think youíll be disappointed.
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Old Sep 20, 12, 9:23 am
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Notes:

Different states have different regulations concerning the use of credit scores in insurance risk assessment, so YMMV both between insurance companies and between states.

Some states prohibit it. Some allow it, but require the insurance company tell you they are using it and how.

Insurance companies can have different scoring models in different states.
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Old Sep 20, 12, 2:39 pm
  #50
 
Join Date: Jul 2011
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Originally Posted by jeanie View Post
I am an Amica customer. Today, I got my insurance renewal in the mail, and it listed the criteria for using insurance scores. They pulled Equifax for me. It said that I could get a free copy of my Equifax report if I disagreed with my renewal premium. I plan on getting the free credit report. Here are the pertinent parts. I am interested to see how people interpret the first paragraph. Do you read it as new accounts in the past 6 months, or all accounts on your credit report?


"Number of Accounts Reported Within 6 Months - Industry research shows that consumers with a large number of reported accounts have more insurance losses. Our score considers the number of accounts reported by your creditors within the last 6 months. To improve this aspect of your score, open new accounts only when needed.

Age of Newest Account - Industry research shows that consumers with recently opened accounts experience more insurance losses. Our score considers how long it has been since you opened your last account. To improve this aspect of your score, consider keeping your oldest accounts active and only open new accounts when needed. In order to achieve the best rating, the age of your most recently opened account must be at least 3.5 years old.

Number of Department Store Accounts - Industry research shows that consumers who open more accounts with department stores experience more insurance losses. Our score considers the number of accounts you have opened with department stores. These accounts can be currently opened or closed. To improve this aspect of your score, open new accounts only when needed, as once you have opened the account and regardless of whether you use it or not, your score will be impacted by this factor.

Percent Open Bankcard Accounts to All Open Revolving Accounts - Industry research shows that consumers who have a higher proportion of open bankcard accounts to open revolving accounts have fewer insurance losses. Bankcard accounts are defined as revolving accounts for banks, bankcard companies, national credit card companies, saving and loan associations and credit unions. Revolving accounts include credit cards and credit lines and are considered open if they have not been reported as closed. Our score considers the number of open bankcard accounts relative to the number of open revolving accounts on your credit report. To improve this aspect of your credit score, consider using fewer sources to obtain goods and services. In addition, be careful not to maintain high balances on bankcard accounts."

Thanks.
I have Amica in TX as well and I'm in the same boat with this notice. My HO premium increased like 15%. My agent says the rates increased due to construction costs and increased claims. I had a claim this year (first year owning a home too) as well. Not sure what to think just yet
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Old Aug 19, 14, 11:25 am
  #51
mia
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Relevant article in Wall Street Journal:

Credit History Can Drive Your Auto Premiums

Drivers with median credit paid 24% more for insurance than those with great credit, according to a study in October by insuranceQuotes.com, a Bankrate company. While insurers use proprietary scoring models, in the world of consumer credit a FICO score of 760 and up is generally considered great credit and below 620 poor.

It's not only car insurance. People with poor credit paid as much as 91% more for homeowners insurance than those with excellent credit. Those with fair or median credit paid 29% more, according to insuranceQuotes.com. (California, Massachusetts and Maryland prohibit the use of credit histories in setting home-insurance rates.)
What is the median FICO score? 723. If these analyses are correct, driving your credit score much below 760 may be costing you money, even if you are not applying for a mortgage or another round of cards.
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