I agree with you I deal with insurance companies everyday here at work....and Geico is my least favorite.

 

This is how Geico can offer low rates to people with a clean insurance/driving history. It is called 'risk pool management'. They dump anyone they see as higher risk or they charge an insurance rate that is soo high, you find another insurance company yourself. That leaves them with a pool of insured drivers that have a lower overall risk....which equals less chances they will have to payout claims...which equals lower rates.

It sucks. But it is reality.

SC~

 

Doesn't AllState use credit score as a factor in your premium? I know that the last time I was browsing for insurance, AllState asked for my SSN to run my credit. I told them to have a nice day and hung up. I don't have bad credit, but I don't want to be with a company that uses a credit score to determine premiums. What I drive and how I drive has nothing to do with how I pay my bills. Plain and simple.

 

Most insurance companies use your credit score as one factor to determine your insurance profile. Your credit score often determines how you can pay for your insurance...if you have bad credit, the insurance company will want a bigger initial payment. If you have good credit, they will allow you to make monthly payments and give little down payment at the beginning of the policy period.

SC~

 

I had a claim with GEICO when I was hit by flying road debris. They fixed my car ($1400) and my premium did not increase. I was rearended by a guy who had State Farm. I initiated a claim with State Farm from the side of the road. The guy who hit me was a good guy and he owned up to the damage. State Farm fixed my car and paid for a rental. I have good things to say about GEICO and State Farm.

 

This is true, but it doesn't end there. I used to be an agent for GEICO, albeit for homeowners' insurance, but their usage of credit scores is similar. They determine eligibility and rate by your credit score, along w/ claims history, etc.. So if you have a perfect claims history, you can still be placed in the HIGHEST pricing teir simply because of poor credit. Their rationale for this (and i explained this literally hundreds of times to potential customers) is that studies were done in the early '90s (geico never told me who did these 'studies') that found that those with higher credit ratings were statistically less likely to make future claims...and thus, those w/ lower credit ratings were statistically more likely to make future claims REGARDLESS of claims history, etc..

-jason

 

I am a capitalist to the hilt, but I am tired of insurance companies. They have like 8 billion in non-taxable, income producing assets so I don't want to hear how their margins are small. For those who deal with insurnace companies, you know what I'm talking about (the government sets aside a certain amount the insurnace companies can have to cover claims. This money is non-taxable. It's kind of like social security (not really in a lock box, there in name only) except it's making money instead of losing money. Ok, rant over.

 

Insurance companies have it made, here in Mass we are controlled only by a few insurance companies, the state sets the rates. We can’t shop around because the state only allows a few companies to offer insurance. So if you want insurance, you are stuck paying these very high rates. Never heard of any one being dropped after one claim, they would just raise your rates and make their money back.