Insurance agent needs to do a credit check for change of address, is this normal

[nightmare]

I just moved from Iowa to Wisconsin (a week back). I call my auto insurance company to report a change of address (It is AllState, have had their insurance from them for 5 years now). After about 15 minutes of giving details, the guy reads a disclaimer saying they need to do some checks one of them being credit check wtf? (luckily I was still attentive, and not bored and sleeping).

I said no, why do you need a credit check, I don’t want unnecessary checks on my credit. He said it is a soft credit check and won’t affect my credit score, what is a soft credit check? So I did not report the change of address, I said I’ll call back and got insurance quotes for some other cars.

Is this normal, do they really need to do a credit check? I have never had claims, never was involved in an accident, never got tickets, no criminal records, no nothing!!!.

[BahnBaum]

This trend has been going on for quite some time. The vast majority of insurance companies use your credit report to develop an "insurance risk" score. Insurers use these scores to identify customers who are "reliable", and who show a demonstrate common sense with money. Insurers think these types of people are less likely to file a claim. Of course, many groups have been screaming that this is a discriminatory practice.

Soft pulls of your credit report don't impact your credit score. They're no different than the credit reports that are run as part of bank's marketing campaigns to determine who they want to prequalify for unsolicited credit card and loan offers.

You'll just have to deal with it, you can't fight city hall!

Alex

[Jever]

This trend has been going on for quite some time. The vast majority of insurance companies use your credit report to develop an "insurance risk" score. Insurers use these scores to identify customers who are "reliable", and who show a demonstrate common sense with money. Insurers think these types of people are less likely to file a claim. Of course, many groups have been screaming that this is a discriminatory practice.

Soft pulls of your credit report don't impact your credit score. They're no different than the credit reports that are run as part of bank's marketing campaigns to determine who they want to prequalify for unsolicited credit card and loan offers.

You'll just have to deal with it, you can't fight city hall!

AlexI was wondering about this too. I had e-mailed several firms to compare rates on an M3 to see just how outrageous it would be. Some companies would give a generic rate based upon my age and driving history while others wanted to pull my credit before even giving an estimate. I'm trying to clean my credit up right now so I turned them down as I didn't want any extra inquiries. I also didn't feel like throwing my SSN all over the place either.

[nightmare]

Too bad I can’t fight city hall, not on my own!!! For now I’ll let them do whatever checks they want to do, have to call them again, and stay on the phone for like 30 min.

They should get charged 50$ every-time they do a credit check, then again they will pass that burden on us the customers!!! Damn there is no way around it.

This trend has been going on for quite some time. The vast majority of insurance companies use your credit report to develop an "insurance risk" score. Insurers use these scores to identify customers who are "reliable", and who show a demonstrate common sense with money. Insurers think these types of people are less likely to file a claim. Of course, many groups have been screaming that this is a discriminatory practice.

Soft pulls of your credit report don't impact your credit score. They're no different than the credit reports that are run as part of bank's marketing campaigns to determine who they want to prequalify for unsolicited credit card and loan offers.

You'll just have to deal with it, you can't fight city hall!

Alex

[BrettInLJ]

You should report your change of address in writing, perhaps notarized and/or sent certified mail, and not give any authorization for a credit check. They have to honor that I believe.

[nightmare]

Are you sure about that, can I just send them a mail. After some argument and some cross checking the agent on the phone told it is required when you move from one state to the other. Don’t know where he came up with that. We should have some rights, Damn it!!!

I’ll call them again see if they accept a mail. Some time back they had change of address on their website, now it seems to have disappeared. The agent on the phone had no clue about the website. Thats what I used when living in Califronia.

You should report your change of address in writing, perhaps notarized and/or sent certified mail, and not give any authorization for a credit check. They have to honor that I believe.

[AG]

Wouldn't your rates change because you're moving from one locality to another? I'm sure they would rerate your policy, based on the new area. I don't think it is as simple as having the statement sent to a different address.

[LDV330i]

Wouldn't your rates change because you're moving from one locality to another? I'm sure they would rerate your policy, based on the new area. I don't think it is as simple as having the statement sent to a different address.
The insurance company will issue you a new policy that meets your new state requirements along with insurance cards that follow those requirements. Your policy may also be issued by another company though still a member of the Allstate family of companies.

[pony_trekker]

Are you sure about that, can I just send them a mail. After some argument and some cross checking the agent on the phone told it is required when you move from one state to the other. Don’t know where he came up with that. We should have some rights, Damn it!!!

I’ll call them again see if they accept a mail. Some time back they had change of address on their website, now it seems to have disappeared. The agent on the phone had no clue about the website. Thats what I used when living in Califronia.

You should check with the local consumer affairs/AG office.

[daihard]

I wonder if it's just AllState or is it because you're moving to another state, like another poster said. I moved within WA recently. All I had to do was call my insurance agent (Farmers, btw) and give them my new address. They sent me a new policy in a week.

[JetBlack330i]

I just moved from Iowa to Wisconsin (a week back). I call my auto insurance company to report a change of address (It is AllState, have had their insurance from them for 5 years now). After about 15 minutes of giving details, the guy reads a disclaimer saying they need to do some checks one of them being credit check wtf? (luckily I was still attentive, and not bored and sleeping).

I said no, why do you need a credit check, I don’t want unnecessary checks on my credit. He said it is a soft credit check and won’t affect my credit score, what is a soft credit check? So I did not report the change of address, I said I’ll call back and got insurance quotes for some other cars.

Is this normal, do they really need to do a credit check? I have never had claims, never was involved in an accident, never got tickets, no criminal records, no nothing!!!.
Farmers did one on me without my knowing.
Apparently, credit worthness is a factor insurance companies found they can correlate to accident prone-ness. :tsk:
They were trying to see if you're still in the right rate class.
Just shop for a new company. If your current rate is low enough to make it worth it, then subject to their checks. Chances are it won't be, in which case you don't change address and let the policy expire.

[BloodRedHog]

BahnBaum is correct - this type of inquiry will not impact your fico.


This trend has been going on for quite some time. The vast majority of insurance companies use your credit report to develop an "insurance risk" score. Insurers use these scores to identify customers who are "reliable", and who show a demonstrate common sense with money. Insurers think these types of people are less likely to file a claim. Of course, many groups have been screaming that this is a discriminatory practice.

Soft pulls of your credit report don't impact your credit score. They're no different than the credit reports that are run as part of bank's marketing campaigns to determine who they want to prequalify for unsolicited credit card and loan offers.

You'll just have to deal with it, you can't fight city hall!

Alex

[daihard]

I find it irritating that they try to factor in all the "possible" bad scenarios into your rate. IMO, one's past driving history (or lack thereof) should be the only personal information that should matter in determining their rate.

[BloodRedHog]

I find it irritating that they try to factor in all the "possible" bad scenarios into your rate. IMO, one's past driving history (or lack thereof) should be the only personal information that should matter in determining their rate.

Apparently, with all the normal factors they use to determine insurance rates, IIRC studies have shown drivers with low credit scores file more claims (and do not maintain their vehicles as well.) :dunno:

[BahnBaum]

Apparently, with all the normal factors they use to determine insurance rates, IIRC studies have shown drivers with low credit scores file more claims (and do not maintain their vehicles as well.) :dunno:
I think the logic the insurance company uses is something like this (it's broad and general, but that's what underwriting is all about):

1. higher credit score = greater level of personal financial stability

2. greater level of personal financial stability = greater ability to absorb small damage losses rather than to file claims against your policy

3. greater ability to absorb small damage losses rather than to file claims against your policy = less claims paid by the insurer

So that either means greater profitability, or, like with my insurance carrier, they're a mutual insurance company so they return their profits back to the insured.

Alex

[JetBlack330i]

Apparently, with all the normal factors they use to determine insurance rates, IIRC studies have shown drivers with low credit scores file more claims (and do not maintain their vehicles as well.) :dunno:
Sure, but that would be discrimination, wouldn't it?
Studies have shown that older workers are less efficient/productive than younger workers.
Why we can't set salary rates based on age?