topic Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report. in General Credit Topics

Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

Anonymous — Tue, 12 Jun 2007 05:06:46 GMT

I really don't know what to say? There is nothing negative on my report except for some inquiries months old. I'm completely shocked!

Then the letter states 3 reasons:
Revolving balances too high. (35% UTL)
Length of history not long enough. (accounts are 12 years old)
Too many inquiries. (just a few on TransUnion and are months old)

What does 35% UTL have to do with my driving history? Then they say, even if I pay off my credit cards they won't re-evaluate me for 90 days. Geico lost a customer.

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

Anonymous — Tue, 12 Jun 2007 05:15:21 GMT

This isn't good.
I'll be on the lookout for an INQ from them.

I have been with them for over 5 years- have not screwed with me this far why start now.

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

Anonymous — Tue, 12 Jun 2007 05:45:27 GMT

I left 6 months ago and wanted to come back. They could not offer my old rate back because my TransUnion credit report showed too many negatives. 35% UTL, 12 years of accounts was not old enough, and a few inquiries that were more than 3 months old.

When Geico gave me the much lower rate my revolving UTL was under 5%. No inqs.

Still, 35% UTL and a few older inq's should not justify about a 20% increase. I am a bit insulted that the letter also stated my credit report was less favorable. I'll get over it. I think it was the less favorable comment that got me upset.

I don't understand how my credit and driving history are related? I pay in advance. It's not like I am asking for credit. Are people that have 35% UTL more likely to get a speeding ticket than people that have 5% UTL? I mean really!

Message Edited by ilovepizza on 06-11-2007 10:45 PM

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

Anonymous — Tue, 12 Jun 2007 07:20:43 GMT

I only had 3 inquiries on my TU CR. That was another factor for my insurance rate being higher. I guess people with more inquiries are higher risk drivers? And people that use credit cards to much are very bad drivers. Does that make sense? I pay all in advance so what is the point of even checking a credit report? There not issuing me credit or installment payments. Geico is nuts.

Message Edited by ilovepizza on 06-12-2007 12:20 AM

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

Tuscani — Tue, 12 Jun 2007 12:53:16 GMT

DAM! 20%!

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

MidnightVoice — Tue, 12 Jun 2007 13:00:29 GMT

According to the web....

Many car insurance companies now use your credit score to determine what you pay. Why? Because they say studies show that customers with poor credit histories are more likely to be in accidents and file claims. They claim that customers with bad scores are higher risks and it's only fair that those customers pay more for their policies. Insurance regulations in many states now allow this practice, although regulatory administrators admit they don't understand the connection between credit scores and car accident claims………….

Companies such as Allstate charge poor-credit customers as much as three times the rate for customers with excellent credit. In fact, credit history is becoming one of the major factors, if not the major factor, in determining insurance rates.

Insurance companies want us to see this as a discount for those with excellent credit and a penalty for those with poor credit. Those with average credit will pay normal premiums. They like to point out that people with outstanding credit scores will experience lower premium cost than before.

Some insurance companies such as Geico also use education level and occupation as additional factors in setting policy cost. In effect, a high-school educated supermarket clerk will pay more than a company president with a master's degree. Why? Again the companies point to studies and statistics that show how jobs and education affect customers' propensity to have accidents and file claims. This may seem a bit unfair — that those who are least able to afford higher rates are the ones who must pay them — but it's all about risk, and not affordability

and, according to the Insurance information instiute

An insurance score is a numerical ranking based on a person’s credit history. Actuarial studies show that how a person manages his or her financial affairs, which is what an insurance score indicates, is a good predictor of insurance claims. Insurance scores are used to help insurers differentiate between lower and higher insurance risks and thus charge a premium equal to the risk they are assuming. Statistically, people who have a poor insurance score are more likely to file a claim.

Message Edited by MidnightVoice on 06-12-2007 08:00 AM

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

Anonymous — Tue, 12 Jun 2007 16:09:17 GMT

Time for the Feds to step in. Credit score should have nothing to do with insurance rates. And here I thought they were dinging me because I was male.

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

MidnightVoice — Tue, 12 Jun 2007 16:36:38 GMT

TheNewWorldMan wrote:
Time for the Feds to step in. Credit score should have nothing to do with insurance rates.

It is all statistics. We are not people, but numbers. All the car insurance people care about is the fact that low credit scores are correlated with a high number of claims

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

Anonymous — Tue, 12 Jun 2007 16:45:13 GMT

@MidnightVoice wrote:

@Anonymous wrote:
Time for the Feds to step in. Credit score should have nothing to do with insurance rates.

It is all statistics. We are not people, but numbers. All the car insurance people care about is the fact that low credit scores are correlated with a high number of claims

But is that even a fact? I think the insurance companies pulled that "fact" straight out of their bum. Until I see hard numbers from an INDEPENDENT source, I think it's a load of manure.

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

MidnightVoice — Tue, 12 Jun 2007 16:50:05 GMT

http://www.consumerreports.org/cro/personal-finance/car-insurance-8-06/overview/0608_car-insurance_ov.htm

An interesting read

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

Anonymous — Tue, 12 Jun 2007 16:57:51 GMT

I recently went to their website (Geico's) for a free online quote. I got an e-mail a few days later saying:

________________________________________________________________________________________________
FAIR CREDIT REPORTING ACT NOTICE

As a result of your recent rate quote or renewal, we obtained information about you from the consumer reporting agency listed below. That information was used in combination with other factors to determine the rate that you were provided.

Trans Union National Disclosure Center
2 Baldwin Place, PO BOX 1000
Chester, PA 19022
or call 1(800)645-1938

Since we may have been able to offer you a lower rate had the report been more favorable, we treat our decision as an adverse action under the Fair Credit Reporting Act. You have the right to obtain a free copy of a consumer report from the reporting agency listed above, provided your request is made within 60 days of receiving this notice. You also have the right to contact the reporting agency listed above to dispute the accuracy or completeness of any information in the consumer report provided. The reporting agency did not determine your rate or play any part in our decision and is unable to provide you with specific reasons for our decision or how the rate was determined. There is an internal appeals process in case of special circumstances and/or corrected credit information.

The specific information provided by Trans Union that may have influenced our decision is:
-Insufficient length of credit history (-)

-Proportion of revolving balances to revolving credit limits is too high, or there are no revolving credit accounts (-)
________________________________________________________________________________________________

I didn't even enter my SS#. They might have said something about me giving them the right to pull my credit under the agreement that I was suppose to read but I wont be purchasing insurance from them.

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

MidnightVoice — Tue, 12 Jun 2007 16:59:39 GMT

Was it a hard pull or a soft one?

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

Anonymous — Tue, 12 Jun 2007 17:06:22 GMT

Well that was mighty darn depressing.

MidnightVoice wrote:
http://www.consumerreports.org/cro/personal-finance/car-insurance-8-06/overview/0608_car-insurance_ov.htm

An interesting read

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

MidnightVoice — Tue, 12 Jun 2007 17:10:19 GMT

princessofpink wrote:
Well that was mighty darn depressing.

I am kinda hoping my insurance costa will go down next year now I have been playing the FICO game for a while

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

MidnightVoice — Tue, 12 Jun 2007 17:17:17 GMT

According to my Insurance Company:

Do all insurance companies use credit?
Most do. According to a 2001 survey by Conning & Co., a research firm based in Hartford, Conn., 92 percent of insurance companies used credit information when rating or underwriting new policies. As of early 2006, every top five auto insurance company was using credit to rate or underwrite new policies.

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

Anonymous — Tue, 12 Jun 2007 17:19:59 GMT

Yeah I was hoping mine would as well, but now that I see how they handle new accounts and new requests for credit I'm basically screwed. I just opened the two Amex cards and will have to get a loan for the new car which puts me in their high risk group regardless of the fact that I'm doing better and more responsible now than I ever have been. Thus, yep I'm depressed by this.

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

MidnightVoice — Tue, 12 Jun 2007 17:24:06 GMT

I have asked my Insurance company which credit file they pull

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

Anonymous — Tue, 12 Jun 2007 18:19:35 GMT

@MidnightVoice wrote:
http://www.consumerreports.org/cro/personal-finance/car-insurance-8-06/overview/0608_car-insurance_ov.htm
An interesting read

All I can say is I'm glad California bans this sort of chicanery.

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

Anonymous — Tue, 12 Jun 2007 18:23:39 GMT

I just received a notice from American Family Insurance and they did the same thing with my homeowner's insurance. That just seems wrong to me!!!

Re: Geico Auto Insurance jacked up my car insurance rate by about 20% because of my credit report.

Anonymous — Tue, 12 Jun 2007 19:42:05 GMT

My auto rates got jacked up out of the blue too. Maybe there is some correlation between credit scores and accident rates (when it rains it pours...), but I suspect it is just another way to rationalize jacking up rates to make more profit. It's like someone who pulls your credit and demands that you pay another months rent deposit....since you got in trouble you're vulnerable to be exploited

In the months before I had my CC chargeoffs, the credit card companies jacked up the rates, fees and penalities adding a huge extra burden to monthly payments and total balances and helping to push me over the edge. After adding hundreds$, they charge you off, and settle for 60% of the balance. They didn't loose a thing, and the consumer who needed a break when they got into trouble, got screwed instead.

It's also happening in the medical care arena as well. If you don't have insurance, they charge you 2 or 3 times as much for the same service thinking you will go into default. So when they settle for 50%, you end up paying what everybody who has insurance pays, yet you get your credit ruined.

It's not right - It's messed up.