topic Re: Progressive Insurance credit score in General Credit Topics

Progressive Insurance credit score

Anonymous — Wed, 20 Jun 2007 19:00:15 GMT

A little while ago there was a discussion about the different kind of scoring that insurance companies do to determine your rate. I thought some might find the information they showed as positive/negatives and neutrals might help since some of these really surprised me...

Favorables:

Most recent reported car loan or lease opened at least 4 years ago (going to change with new car!)

Only two credit inquiries in the past 24 months

Revolving account balances total 10 -19% of available revolving credit

More than 5 years of reported credit history

Open loan and account balances total less than 95% of total available credit

2 or fewer loans or accounts opened in past 12 months

No bank revolving account opened in the last 4 months

Unfavorable

2 loans or accounts with satisfactory current payment status (are they saying I need more?)

1 or more installment loans in collection, default, repossesion, foreclosure or charge off

Earliest reported account or loan opened after age 25

Collection, default, reposession, foreclosure or charge-off withing the past 12 months (thank you EX for the new charge off date)

Neutral

History of 1 or more accounts with payments past due more than 30 days (I guess thats because these are old accounts)

Re: Progressive Insurance credit score

Anonymous — Wed, 20 Jun 2007 19:02:48 GMT

Princess,

Did you get this from Progressive or know that they used this when quoting you rates?

Re: Progressive Insurance credit score

Anonymous — Wed, 20 Jun 2007 19:06:17 GMT

After I got my quote they had a link on the side of the page that said something about my credit rating(or score something like that.) When I clicked on it it can up with a page that said Progessive uses credit info in addition to other information to determine your rate. They show you a bell curve with where you fit into the curve and then show you your positives and negatives. I printed it out so I could pass it on here.

Re: Progressive Insurance credit score

MidnightVoice — Wed, 20 Jun 2007 19:08:21 GMT

https://onlineservice1.driveinsurance.com/interact-cgi/rc/insterm/rcinscredit.asp

try that link for proressive info

Re: Progressive Insurance credit score

Anonymous — Wed, 20 Jun 2007 19:32:36 GMT

Thanks princessofpink and MidnightVoice for the info

In fact the reason my auto insurance score dropped was because I was building more stronger credit.

Message Edited by ilovepizza on 06-20-2007 12:32 PM

Re: Progressive Insurance credit score

Anonymous — Wed, 20 Jun 2007 20:19:26 GMT

I'm dropping Progressive as my carrier. That explains by my rates went through the roof! Well, I've bailed on them and saved a ton of money....

Re: Progressive Insurance credit score

Anonymous — Wed, 20 Jun 2007 20:36:25 GMT

Allstate has been wonderful to me and has dropped my rate 3 times since I started with them! I recommend!

Re: Progressive Insurance credit score

Anonymous — Wed, 20 Jun 2007 20:36:48 GMT

Do you mind my asking who you decided to go with that saved you money?

Rocket01 wrote:
I'm dropping Progressive as my carrier. That explains by my rates went through the roof! Well, I've bailed on them and saved a ton of money....

Re: Progressive Insurance credit score

Anonymous — Wed, 20 Jun 2007 23:01:48 GMT

I just bailed on Progressive after they continually jacked my rate for no reason, and I've NEVER filed a claim with any insurance carrier. I went from $1700 for 6 months down to $600 for 3 vehicles.

Re: Progressive Insurance credit score

fused — Wed, 20 Jun 2007 23:05:28 GMT

Ahhh...I am so happy my state (Hawaii) passed legislation that prohibits insurance companies from pulling credit.

Re: Progressive Insurance credit score

Anonymous — Thu, 21 Jun 2007 01:08:31 GMT

Same here in California. I don't think credit scores should have a bloody thing to do with insurance rates.

Re: Progressive Insurance credit score

Anonymous — Thu, 21 Jun 2007 06:20:17 GMT

Using credit scores to give an insurance quote is just as stupid and using your driving record to evaluate an application for credit. Why are insurance companies able to get away with it and banks aren't? Well, we have our polititians to thank for that. I love Progressive. They advertise the lowest rates and yet have the highest rates of all the carriers I've checked and I've checked alot. I remember calling them a couple of years ago, they quoted me $4K for one car per year for 10-20-10 coverage! On top of that they wanted to get paid in cash!!! I went with Allstate and paid $800 every six months. I'm currently with Metlife and pay about $600 every six months and have 250-500-250 coverage. Geico was pretty comparable to Metlife as well.

Re: Progressive Insurance credit score

Anonymous — Thu, 21 Jun 2007 13:32:50 GMT

Progressive $1650 for 6 mos

New carrier (Name TBD, but received quote from my broker) $751 for six months.

Same coverage - pretty outrageous.

Re: Progressive Insurance credit score

Anonymous — Thu, 21 Jun 2007 14:21:56 GMT

Rocket....almost the exact same numbers as me. I bailed and saved 65%. Progressive is out of control.

Re: Progressive Insurance credit score

Anonymous — Thu, 21 Jun 2007 14:37:31 GMT

Now that's good news, I hope the rest will follow!

Re: Progressive Insurance credit score

Anonymous — Thu, 21 Jun 2007 14:40:19 GMT

Clarification...I read part of the post that stated HI passed a law prohibiting insurance companies from pulling credit. so, what I intended was...

Now that's good news, I hope the rest of the states will follow!

Not that I would shed any tears if others followed us and also bailed on Progressive...

Re: Progressive Insurance credit score

Anonymous — Thu, 21 Jun 2007 18:01:54 GMT

So this does not happen in California, correct?

I have Progessive, but I've never heard about them pulling my credit before.

Re: Progressive Insurance credit score

Anonymous — Thu, 21 Jun 2007 19:06:14 GMT

A company cannot pull credit in California.

Insurance companies use The Law of Large Numbers which states roughly that the more you can define groups of individuals in buckets and the larger those buckets the more accurately you can predict behavior in the group.

So, if companies have less information or characteristics to group people in buckets (like California) you end up paying more.or less depending on where you are at in the spectrum.

I worked for an insurance company in Washington state that refused to use credit as a factor. As a result, people with bad credit flocked to the comapny I worked for (lower premium than companies using credit as a factor) and the insurance company lost millions of dollars. They finally researched and found out that credit scores can be highly predictive in determining the likeliness of an accident.

I assume though that most people on these boards are having issues with credit and just do not like paying higher premiums and will not like the reasons behind why a company uses credit even if it does make sense to do so. I don't like paying higher premiums either but I agree with using credit since I understand that when I fix all of my credit issues I will be rewarded by lower insurance rates and also lower interest rates.

Re: Progressive Insurance credit score

Anonymous — Thu, 21 Jun 2007 19:24:35 GMT

i have never had an insurance company ask to pull my credit. i assume they would need a written or verbal authorization?

Re: Progressive Insurance credit score

Anonymous — Fri, 27 Jul 2007 18:07:05 GMT

The insurance industry claims, through statiscal analysis, that there is a strong relationship between credit scores and accidents, that it is one of the strongest correlations they have. The link between both of these may not be as simple and, in fact, dependent upon each other. Why using credit scores may not make much sense is described below.

First, there is a possibility, and I'm speaking from personal experience, that filing a claim, which results from something unexpected, like an accident, may itself be a cause of a lower credit score. When I had a car accident, my $1000 car was wrecked and so I had several new, unexpected expenses like deductibles, buying a new car, registration, sales tax, renting a car, towing and storage, and having the second car I bought in a hurry break down. I found I couldn't cover all expenses for those few months, including minimum payments for revolving accounts, and as a consequence, found myself using more credit. My credit score was dramatically lower after 3 months. It was the accident that caused a lower score, not a lower score that predicted risk. In fact, I had an excellent credit score and then I had an accident. Yet that will not count toward the statistics; it will be the after-accident credit score that would be correlated.

Second, a possiblity may exist that those with higher credit scores may file fewer claims. When making the decision whether or not one should file a claim or not, what would cost more, borrowing $350 to fix a windshield, or filing a claim and having an ncrease of $400 per year for the next five years. Borrowing $350 may not exist as an option for those with lower credit scores and thus can again, be a reason for the link between credit scores and filing claims.

Studies will need to be conducted to test these relationships. For example, let's say we take a certain date, like June 2006, and take a sample of those who filed a claim during that month for the first time. If information is available, then take the credit scores of all those people, and compare the correlation between both points. Was the credit score predictive? For the other relationship, we can send out a survey to a large sample of people and ask whether a filing a valid claim was avoided, the value of the claim, and the credit scores. Is there, in fact a relationship between avoiding filing a claim and credit scores?

We can get further insight about why this correlation exists. At this time, the use of baseless, sweeping, fallacious generalizations with many exceptions, to increase premiums is unethical and cheating many people of their hard-earned money. I already have two claims so I doubt the use of credit scores will cause a further increase in my policy, but I feel such a policy is obviously, without a doubt, wrong.

Here's another analogy, There is a link between lack of intake of Vitamin C and the risk of getting scurvy. Getting scurvy (filing a claim, for example) does not cause one to take less Vitamin C (lower credit score). It's taking less vitamin C that causes scurvy. It would not make sense to prevent one from getting scurvy so they could take more Vitamin C. My point is correlations don't indicate cause and effect in both directions or even in one direction all the time. It is this point that the insurance companies are so crassly ignoring.