Notice in Auto Insurance Bill

11 years ago

Seems the insurance companies have been 'found out' on using a person's credit reports to set their rates. Our State Farm car insurance bill contains a statement in teeny type that says they do this, and that if they can't see your reports, your rate is set using 'averages' of other insured drivers.

Our credit reports are frozen. No wonder our bill seems so high!

I've called our agent to see how this can be rectified. Maybe they can tell me *when* they want to look at our reports; I can 'un-freeze' for set periods or for only State Farm. I suppose I can obtain a copy of our report and send it to them, too.

What do you think?

Featured Answer

Elmer J Fudd

11 years ago

last modified: 11 years ago

Sorry nicole, I've never heard of Clark Howard. I googled and saw he was a talk show host. Sounds from your mentioning him that he's popular. I don't tend to find people on the radio talking about financial matters to be very interesting (and that's probably just because of my own background), maybe he's different. The example you cite sounds like the product of someone's imagination.

There's a big difference between something that could happen (ie, it's not impossible but has happened only in limited numbers) and something that's common and more likely. That's what that example sounds like to me, not impossible but also not common. My comment was that I know of credit rating freezes, I don't know if it's a good idea or not. This could very well be common knowledge to all the world but still something I don't know (I'm a CPA but did mostly corporate rather than individual work).

There's an ocean of stuff I don't know. I'll ask around on this topic and see what I find out. I'll look for when I can listen to this guy's show. Thanks for the info.

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Comments (11)

socks
11 years ago
I think they will try to give you the brush-off. Let us know what happens. If your credit report has not changed much since they last accessed it, probably won't affect your rate.
User
11 years ago
My credit reports are frozen and my rates aren't high because of it.Maybe you should shop around for new insurance, I did....saved a $1000 on my primary home insurance this year. The reason my rate was high was because of the fire danger of living next to a dense wooded area. Some insurance companies don't care, some do.

http://www.consumer.ftc.gov/articles/0497-credit-freeze-faqs
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Elmer J Fudd
11 years ago
last modified: 11 years ago
Is having a credit report freeze warranted or an over-reaction? Is it more trouble to have one or to not have one? If it's important, is there any jeopardy pulling it off for some period of time? I don't know.

I know about them, but I've never considered doing it for myself and I've never heard anyone talking about it. These mean nothing, maybe people I know have done it and simply haven't mentioned it. Maybe I'm an outlier?
marie_ndcal
11 years ago
Some people freeze their credit information due to identify theft or other legal reasons. As easy as it is to get information on people now, many are doing it to stop every one from finding out about your "life". Just found out today that even some charities are doing that especially if a person makes a large donation etc. Had a special seminar at the assisted living home and when I remember the origination that gave it, will report on that.

As to auto insurance? Mine dropped almost 100.00 when I moved from a small town to a bigger city--we can't figure that out. But I did change companies Many companies operate under several different names and it that way they find out way too much for me. Allstate does that.
User
11 years ago
last modified: 11 years ago
SnidelyWhiplash...the example Clark Howard used, yes his is frozen too. was a college student fraudulently gets a loan in your name for instance to pay for their college tuition. They don't owe the money until they graduate and they come after YOU. The money can be automatically taken out of your bank account for an over due loan, without your permission. Then YOU have to prove it wasn't you that took out the loan in order to get your money back. How about just skipping all THAT and no one, even yourself can take out a loan.

If you need a loan, then unfreeze the one agency the credit check will be run through, then refreeze it when the loan is complete. The fee for unfreezing is generally $9 for each of the 3 agencies.

Snidely....if you want to read more I furnished a link in my prior post.....
joyfulguy
11 years ago
Yuck.

o j
redcurls2
11 years ago
This isn't something new. MOST types of insurance check your credit..Auto and homeowner's especially.
chisue
Original Author
11 years ago
I'm sure this insurance company practice has been common -- but generally unknown to the public. I was surprised to get a notice in our auto insurance bill INFORMING me that State Farm does consider your credit rating when setting your rates. They stated that my DH's report was closed to inquiry, so they had used mine!

Years ago we applied for a store CC to save 10% on a large purchase. When the clerk ran my DH's soc. sec. number our report was incorrect, listing another name and another address! We contacted one of the reporting agencies to rectify it. (Partial success.) It was then that we decided it would be prudent to freeze.

I think we have 'unfrozen' on only two occasions since then -- simple to 'open' the record at one reporting agency for X hours and to only X company. We seldom require credit -- not opening new accounts for CC's or establishing utility service, etc. However, I had not thought about hiding our *good* credit causing us trouble. Now it's State Farm...what else?

The credit reports are so rife with errors -- that the report keepers refuse to correct -- that I wonder how *credible* they can be!
Elmer J Fudd
11 years ago
There was a thread discussing insurance companies and credit ratings not too long ago.

I checked with my own agent at that time and learned that my state (California) doesn't permit that practice. Obviously other states do.
cynic
11 years ago
last modified: 11 years ago
Been 'found out'? I've know about them doing it here for over a decade or more! LOL Nothing new. Nothing hidden. Mostly ignored by people who don't read their bills. (And yes, that includes me until I saw that tidbit.) What's more, if you put in a claim, you get a credit report pulled on you too, and that's before it's even submitted. As I recall they did a background check on you too, at least on claims. An associate of mine was a high-level insurance company investigator for a lot of years. You might be amazed at some of the stuff that goes on.

Notice in Auto Insurance Bill

Elmer J Fudd

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Notice in Auto Insurance Bill

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