Home Owners insurance

[BillyBalata]

What the heck is ths? Another insurance scam?

 

 

I got two letters from the insurance company where I have the policy on my house. One is the yearly bill/notice they have sent the bill to my mortgage company. The 2nd...is to notify me that they always try and give their customers the best rates they can. It has come to their attention that they are not able to provide me their best rate because of the recent credit check they did on me thru TransUnion. That since there is a ding on my credit report, I am considered a risk and need to be charged a higher rate.

 

My first thought...was what the F do they need to be doing a credit check on me for? I have had my house insured thru them for 20 years. Never filed a claim in those 20 years

 

Secondly, down at the bottom of the letter it gave the info they got from TransUnion....insufficient credit history and also something about not enough revolving credit. What the hell is that??? 20 years of house payments and never missing a payment. My freakin mortgage will be paid off in 8 months! 7 or 8 car loans over the last 30 years. Only one credit card over the last 15 years that always gets paid off within a month or two of using it.

 

Not sure what I should do about this TransUnion thing, but my insurance company is being informed this afternoon I will be switching companies

[rajncajn]

What the heck is ths? Another insurance scam?

I got two letters from the insurance company where I have the policy on my house. One is the yearly bill/notice they have sent the bill to my mortgage company. The 2nd...is to notify me that they always try and give their customers the best rates they can. It has come to their attention that they are not able to provide me their best rate because of the recent credit check they did on me thru TransUnion. That since there is a ding on my credit report, I am considered a risk and need to be charged a higher rate.

 

My first thought...was what the F do they need to be doing a credit check on me for? I have had my house insured thru them for 20 years. Never filed a claim in those 20 years

 

Secondly, down at the bottom of the letter it gave the info they got from TransUnion....insufficient credit history and also something about not enough revolving credit. What the hell is that??? 20 years of house payments and never missing a payment. My freakin mortgage will be paid off in 8 months! 7 or 8 car loans over the last 30 years. Only one credit card over the last 15 years that always gets paid off within a month or two of using it.

 

Not sure what I should do about this TransUnion thing, but my insurance company is being informed this afternoon I will be switching companies

I would call my insurance commissioner immediately & raise holy hell. Insurance companies right now are doing anything & everything they can to raise peoples rates and they shouldn't be able to get away with it.

 

SUPERCALIFRAGILISTICEXPIALIDOCIOUS !!!ing insurance companies...these mother SUPERCALIFRAGILISTICEXPIALIDOCIOUS !!!ers really get my blood boiling.

[TimC]

Insurance is the biggest scam in the history of scams. Every insurance company makes the African telling you that you won the lottery look legit in comparison.

 

Shop around and drop those SOB's.

[darin3]

Um, I don't think they can randomly run your credit without your permission. Hopefully you didn't sign something that had fine print stating that they could. This is BS either way.

[gerry.harris]

I work in insurance and insurance companies can check your credit report. Our company does not use your credit to determine your rates, but many companies do. They use your credit report and claims history to tier people into different rating categories. The companies that do this can check your credit report at each renewal without your permission. The credit report that they check is not the same as having your credit checked if you were buying a car or taking out a loan. It does not go against your credit score as a hit on your credit report when an insurance company checks it so they can check it at each renewal without permission. Not saying that this is right and my company, Farm Bureau, does not do this but many other companies are starting to go to this tiered rating based on credit.

[BillyBalata]

I work in insurance and insurance companies can check your credit report. Our company does not use your credit to determine your rates, but many companies do. They use your credit report and claims history to tier people into different rating categories. The companies that do this can check your credit report at each renewal without your permission. The credit report that they check is not the same as having your credit checked if you were buying a car or taking out a loan. It does not go against your credit score as a hit on your credit report when an insurance company checks it so they can check it at each renewal without permission. Not saying that this is right and my company, Farm Bureau, does not do this but many other companies are starting to go to this tiered rating based on credit.

 

 

Perhaps you can explain WHY this even matters? We're required to pay for our policy in advance. We don't get 6 months of insurance on credit. Why then, if a person has a bad credit rating does it matter and cause his rates to be even higher? Their letter states they like to give their customers the best rates they can, but then they go do credit checks looking for reasons to raise their rates. Bogus reasons at that!

[The Irish Doggy]

I think there are three separate issues here: your background with the company, use of the credit check, and your credit report.

 

Based on your 20 years, good lord are they stupid to send you a letter like that. I would politely contact my insurance agent and state your case that based on your good standing and loyalty with them all these years, you should get the best rate. Any company worth its salt should recognize that.

 

As for use of the credit check, I think it is OK to use when establishing a policy. Seems fair that those who pay their bills, manage their credit well, have low-risk variables, etc. should get the best rates. Since that's me, I'm biased I guess.

 

I'd be looking carefully into that credit report to make sure all the info they have is accurate. I know a high percentage of people have incorrect info in their credit report. My dad and I had to straighten some things out a while back as some of our credit cards were attributed to the wrong Sr./Jr. and some cards with very good payment history weren't even listed at all, and some old ones that were canceled were still considered active. Boy that was a good time...

[junebugz]

I think there are three separate issues here: your background with the company, use of the credit check, and your credit report.

 

Based on your 20 years, good lord are they stupid to send you a letter like that. I would politely contact my insurance agent and state your case that based on your good standing and loyalty with them all these years, you should get the best rate. Any company worth its salt should recognize that.

 

As for use of the credit check, I think it is OK to use when establishing a policy. Seems fair that those who pay their bills, manage their credit well, have low-risk variables, etc. should get the best rates. Since that's me, I'm biased I guess.

 

I'd be looking carefully into that credit report to make sure all the info they have is accurate. I know a high percentage of people have incorrect info in their credit report. My dad and I had to straighten some things out a while back as some of our credit cards were attributed to the wrong Sr./Jr. and some cards with very good payment history weren't even listed at all, and some old ones that were canceled were still considered active. Boy that was a good time...

This is not a bad idea since it is quite possible that your state insurance commission could have imposed some sort of rule stating that a company needs to notify a customer if they are not getting the best rate because of credit problems. It is the companies fault for not proactively catching this type of fallout from long-term customers getting a notice like this upon renewal though. I am willing to bet if you ask your agent about this, they should not only be able to tell you why the company is all of a sudden using the credit checks, but more importantly they should be able to get your rate back to where it was.

[Perchoutofwater]

First, I would talk to my agent, and if he/she can't get you a better rate, then I would start shopping rates.

 

I can understand why insurance companies want to check the credit of their insured. If a person has good credit, then they can pay for minor repairs to the house that do not fall under the policy, but that if left in disrepair might cause damage to the house that does fall under the coverage. A well maintained building is less likely to have a claim on it than a poorly maintained building. It is assumed that if you have good credit, you can afford to maintain the building. If you have poor credit, it is assumed that when your air handler goes out, you may be able to replace it right away, so you will start getting expansion and contraction which could cause major damage that does fall under your homeowners insurance.

[Ursa Majoris]

What the heck is ths? Another insurance scam?

I got two letters from the insurance company where I have the policy on my house. One is the yearly bill/notice they have sent the bill to my mortgage company. The 2nd...is to notify me that they always try and give their customers the best rates they can. It has come to their attention that they are not able to provide me their best rate because of the recent credit check they did on me thru TransUnion. That since there is a ding on my credit report, I am considered a risk and need to be charged a higher rate.

 

My first thought...was what the F do they need to be doing a credit check on me for? I have had my house insured thru them for 20 years. Never filed a claim in those 20 years

 

Secondly, down at the bottom of the letter it gave the info they got from TransUnion....insufficient credit history and also something about not enough revolving credit. What the hell is that??? 20 years of house payments and never missing a payment. My freakin mortgage will be paid off in 8 months! 7 or 8 car loans over the last 30 years. Only one credit card over the last 15 years that always gets paid off within a month or two of using it.

 

Not sure what I should do about this TransUnion thing, but my insurance company is being informed this afternoon I will be switching companies

Don't bother trying American Families - they sent me the exact same thing. My credit rating is north of 740 which I understood made my rating "excellent" - until now.

[Ursa Majoris]

Perhaps you can explain WHY this even matters? We're required to pay for our policy in advance. We don't get 6 months of insurance on credit. Why then, if a person has a bad credit rating does it matter and cause his rates to be even higher? Their letter states they like to give their customers the best rates they can, but then they go do credit checks looking for reasons to raise their rates. Bogus reasons at that!

Bingo.

[BillyBalata]

Don't bother trying American Families - they sent me the exact same thing. My credit rating is north of 740 which I understood made my rating "excellent" - until now.

 

 

That's who we're talking about...

[Ursa Majoris]

That's who we're talking about...

That's two customers they're losing then.

[BillyBalata]

Probably. Just got home from work and making a call now.

[Ursa Majoris]

Probably. Just got home from work and making a call now.

Let us know how it goes - I have had this on my to-do list for weeks and not got around to it.

[BillyBalata]

Well, that's a first....after all said and done, I am now getting my insurance for $50 less.

 

The gal I talked to, said the best way to explain this is that the letter isn't actually from them but from the federal gov't. How that works out, I'm not totally buying her explanation. But she said basically it's a form letter they have to send out to all their customers, and in a lot of cases their premium is not actually going up. I told her mine did. She said no it didn't. Her records show it went down! We quoted each other numbers. She said the statement I had in my hand was wrong and the price she was telling me was correct and was $52 cheaper for the year then my statement was. So she is going to try and get a hold of my mortgage company before they pay the bill. Otherwise I'm getting a refund.

Edited September 7, 2007 by BillyBalata

[Ursa Majoris]

Well, that's a first....after all said and done, I am now getting my insurance for $50 less.

 

The gal I talked to, said the best way to explain this is that the letter isn't actually from them but from the federal gov't. How that works out, I'm not totally buying her explanation. But she said basically it's a form letter they have to send out to all their customers, and in a lot of cases their premium is not actually going up. I told her mine did. She said no it didn't. Her records show it went down! We quoted each other numbers. She said the statement I had in my hand was wrong and the price she was telling me was correct and was $52 cheaper for the year then my statement was. So she is going to try and get a hold of my mortgage company before they pay the bill. Otherwise I'm getting a refund.

Mine also went down, by roughly a buck and a half a month. That isn't the point though - the letter states that you aren't getting the BEST rate. That's the argument I'm going to be having with my agent.

[The Irish Doggy]

Well, that's a first....after all said and done, I am now getting my insurance for $50 less.

 

The gal I talked to, said the best way to explain this is that the letter isn't actually from them but from the federal gov't. How that works out, I'm not totally buying her explanation. But she said basically it's a form letter they have to send out to all their customers, and in a lot of cases their premium is not actually going up. I told her mine did. She said no it didn't. Her records show it went down! We quoted each other numbers. She said the statement I had in my hand was wrong and the price she was telling me was correct and was $52 cheaper for the year then my statement was. So she is going to try and get a hold of my mortgage company before they pay the bill. Otherwise I'm getting a refund.

 

Well that's good news. Now check that credit report. Seriously.

[BillyBalata]

Well that's good news. Now check that credit report. Seriously.

 

 

I know this has been discussed here before and have done a search but can't find anything. Whats the best way to go about doing that?

[CaptainHook]

annualcreditreport.com

 

you can only do it once a year, but you can get your report from all three. Everything but the score. that you'd have to pay for.

[TheShiznit]

Perhaps you can explain WHY this even matters? We're required to pay for our policy in advance. We don't get 6 months of insurance on credit. Why then, if a person has a bad credit rating does it matter and cause his rates to be even higher? Their letter states they like to give their customers the best rates they can, but then they go do credit checks looking for reasons to raise their rates. Bogus reasons at that!

 

OK...let me try. But first know I fought tooth and nail against companies in Illinois to be able to do this.

 

As you might know, Actuaries basically set the risk for insurance companies. They determine within certain geographic areas what is the chance of a certain risk and assign a multiplier to it. Most policies with regard to homeowners will be little different company to company. Homeowners is generally a loss leader. Auto is where companies make HUGH profits. Now, why do they run credit....well....the Actuaries did a study and found that people with low credit scores are actually 60% more likely to burn their house down for the insurance money...that is why if you file bankruptcy you will most likely not get a good insurance company for your home. In the same study, it was found that low credit score people generally will claim more times per policy life than those whose credit is higher....Why??? Those whose credit is higher carry a higher deductible to save money on their premium. Hence, they pay cash for the smaller claims. Now, you can agree or disagree with this...like I said, I fought it tooth and nail...but they are right. I have been an advisor for ten years and have seen this theory in action and they are right.

 

Suggestions: If you are a member of the military....buy USAA coverage if you can...they are AWESOME. If you are a member of AARP...look into The Hartford....they have great rates for those of us who are long in the...well you know!!!!

 

I hope this helps....oh yeah...btw....the answer the American Family person gave you was BUNK. The federal government has nothing to do with State insurance commissioner jursidiction. 90% of all companies who use credit to rate policies will not penalize their clients once they are tiered if after the fact they have credit difficulties. However, when a company like AMFAM, who recently went to credit reporting, make this switch, they generally will offer the best rates to their existing clients only if they agree to a credit check....that should have come from the company....if you refuse to do so...you get a decent rate....just not the best offered.

 

Sorry for the rambling...hope this helps.

 

[Ursa Majoris]

OK...let me try. But first know I fought tooth and nail against companies in Illinois to be able to do this.

 

As you might know, Actuaries basically set the risk for insurance companies. They determine within certain geographic areas what is the chance of a certain risk and assign a multiplier to it. Most policies with regard to homeowners will be little different company to company. Homeowners is generally a loss leader. Auto is where companies make HUGH profits. Now, why do they run credit....well....the Actuaries did a study and found that people with low credit scores are actually 60% more likely to burn their house down for the insurance money...that is why if you file bankruptcy you will most likely not get a good insurance company for your home. In the same study, it was found that low credit score people generally will claim more times per policy life than those whose credit is higher....Why??? Those whose credit is higher carry a higher deductible to save money on their premium. Hence, they pay cash for the smaller claims. Now, you can agree or disagree with this...like I said, I fought it tooth and nail...but they are right. I have been an advisor for ten years and have seen this theory in action and they are right.

 

Suggestions: If you are a member of the military....buy USAA coverage if you can...they are AWESOME. If you are a member of AARP...look into The Hartford....they have great rates for those of us who are long in the...well you know!!!!

 

I hope this helps....oh yeah...btw....the answer the American Family person gave you was BUNK. The federal government has nothing to do with State insurance commissioner jursidiction. 90% of all companies who use credit to rate policies will not penalize their clients once they are tiered if after the fact they have credit difficulties. However, when a company like AMFAM, who recently went to credit reporting, make this switch, they generally will offer the best rates to their existing clients only if they agree to a credit check....that should have come from the company....if you refuse to do so...you get a decent rate....just not the best offered.

 

Sorry for the rambling...hope this helps.

 

OK, thanks for the explanation but there are two points that are still in question. You mention credit SCORE and I know for a fact that mine is well over 740 and has been for ages. I have a spotless credit record. However, the letter from AMFAM said there were "too many credit enquiries" - well, no $hit, Batman, I recently switched credit cards to a better cashback one (not available to those with less than excellent credit) and some f'n stupid wankers from AMFAM added another enquiry to my total.

 

Also, I have made a grand total of two claims on my auto/house insurance in ten years - one $250 for destroyed freezer food after a storm and one $750 repair to my car window after a break-in. I fork over $750 / year for the house and about $900 for the car. That right there tells me these jagoffs have already made over 1,600% off me.

 

It is a bag of $hit, no more, no less. It is yet another salami scheme to scrape even more money out of our pockets and into the pockets of these worthless conniving criminal turds.

 

Thank you.

 

Edit: Thanks for the tip about AARP - I'll look into that.

Edited September 8, 2007 by Ursa Majoris

[BillyBalata]

It is a bag of $hit, no more, no less. It is yet another salami scheme to scrape even more money out of our pockets and into the pockets of these worthless conniving criminal turds.

 

Thank you.

 

Well said!

[TheShiznit]

OK, thanks for the explanation but there are two points that are still in question. You mention credit SCORE and I know for a fact that mine is well over 740 and has been for ages. I have a spotless credit record. However, the letter from AMFAM said there were "too many credit enquiries" - well, no $hit, Batman, I recently switched credit cards to a better cashback one (not available to those with less than excellent credit) and some f'n stupid wankers from AMFAM added another enquiry to my total.

 

Also, I have made a grand total of two claims on my auto/house insurance in ten years - one $250 for destroyed freezer food after a storm and one $750 repair to my car window after a break-in. I fork over $750 / year for the house and about $900 for the car. That right there tells me these jagoffs have already made over 1,600% off me.

 

It is a bag of $hit, no more, no less. It is yet another salami scheme to scrape even more money out of our pockets and into the pockets of these worthless conniving criminal turds.

 

Thank you.

 

Edit: Thanks for the tip about AARP - I'll look into that.

 

Now tell us how you really feel. My response to the salami scheme thing is to tell people to drop their full coverage on their auto and go to state minimums.....and when they pay off their house drop their homeowners insurance....they look at me like I am crazy...then I tell them quit complaining if they are not willing to do something about it....usually good for a good laugh!!!

 

Too many inquiries on your credit report does count against you. It means you are actively seeking MORE credit in addition to what you have. That can have negative consequences...not right away...but if the trend continues and they rate for that. As far as claims are concerned, let me give you the skinny. Raise you home deductible to 1000 dollars if you can and take care of the small stuff. You will likely save as much in premium in ten years, if not more, than what you spend on damage. Remember, insurance is there for CATASTROPHIC events....no maintenance. So, while you might feel that 250 was a legit claim, it irkes the insurance companies because they feel they are there to pay the 10000 dollar claims and what not. Anyway...just giving you the inside scoop on how they think. Also, raise your collision deductible to 500 on your auto and then lower your comp to 100. Insurance companies will always charge you more for things you can control versus a tree falling on your car. In my state, Comp claims don't even count against you record unless you start becoming Mr./Mrs. wrong place wrong time all the time!!!

 

Anyway...I hope your frustration comes to an end....and let us know how AARP looked in your state versus AMFAM.

[Ursa Majoris]

Now tell us how you really feel. My response to the salami scheme thing is to tell people to drop their full coverage on their auto and go to state minimums.....and when they pay off their house drop their homeowners insurance....they look at me like I am crazy...then I tell them quit complaining if they are not willing to do something about it....usually good for a good laugh!!!

 

Too many inquiries on your credit report does count against you. It means you are actively seeking MORE credit in addition to what you have. That can have negative consequences...not right away...but if the trend continues and they rate for that. As far as claims are concerned, let me give you the skinny. Raise you home deductible to 1000 dollars if you can and take care of the small stuff. You will likely save as much in premium in ten years, if not more, than what you spend on damage. Remember, insurance is there for CATASTROPHIC events....no maintenance. So, while you might feel that 250 was a legit claim, it irkes the insurance companies because they feel they are there to pay the 10000 dollar claims and what not. Anyway...just giving you the inside scoop on how they think. Also, raise your collision deductible to 500 on your auto and then lower your comp to 100. Insurance companies will always charge you more for things you can control versus a tree falling on your car. In my state, Comp claims don't even count against you record unless you start becoming Mr./Mrs. wrong place wrong time all the time!!!

 

Anyway...I hope your frustration comes to an end....and let us know how AARP looked in your state versus AMFAM.

OK, I have looked into raising deductibles and all the rest - it is pointless in terms of lowering the premiums. As for credit inquiries, I have applied for exactly one line of credit in the past three years - a superior credit card, as stated earlier. Maybe Amfam count one as too many? Or maybe they're just making $hit up to rip me and countless others off?

 

The $250 claim was actually $150 until the Amfam guy told me to claim $250. And why bother writing insurance for spoiled freezer food if it's really, really irritating to them? I have never claimed for household maintenance - it's never crossed my mind.

 

You may well work in the industry but to us out here, the industry is a rapacious money machine that does everything it possibly can to screw it's customers and then weasel out of paying anything when the time comes - see Orleans, New. Consider - there are two of us here making this complaint and neither of us is a credit risk and as far as I am aware, each of us is a very long-standing customer with no history of spurious or doubtful claims - and we pay on time, every time. I'm willing to bet virtually every Amfam customer got this same letter.