by Guest » Fri Mar 24, 2006 09:09 am
Hi !
Many of us must have noticed the recent reports of some minor clashes been depicted in some eminent websites highlighting the differences between the Berkshire Hathaway (NYSE: BRKa)(NYSE: BRKb) unit GEICO against the Consumer Federation of America (CFA) and the not-for-profit insurance agency New Jersey Citizens United Reciprocal Exchange (NJ CURE).
The CFA and the NJ CURE have recently questioned the basis of the risk-assessment policies of several insurance companies carrying a lot of goodwill in the world market.
These efforts are mainly directed to establish an appeal to the state governments in order to effect a ban on the insurance practices that relate the consumers' eligibility and premium amounts to their educational background and occupation. Some of the notable companies like GEICO have been blamed of charging different rates to people from different professional streams and this has been backed with records of the different quotes offered by the company. This might be very important at throwing some light upon the insurance hazards faced by the minorities, since the minorities mostly occupy the low paid jobs. But then again as we analyze deeper into the problem we have only education and occupation as the factors contributing to GEICO's discriminations. We are yet to track down the other factors, since CFA and NJ CURE are yet to discover them. Once the CFA and NJ CURE have raised interesting questions about the proceedings and intentions of GEICO, they have also submitted the underwriting guidelines of their target to the National Association of Insurance Commissioners (NAIC).
Now, it has become all the more important for us to see if NAIC would consider this argument or dismiss it !
Many of us must have noticed the recent reports of some minor clashes been depicted in some eminent websites highlighting the differences between the Berkshire Hathaway (NYSE: BRKa)(NYSE: BRKb) unit GEICO against the Consumer Federation of America (CFA) and the not-for-profit insurance agency New Jersey Citizens United Reciprocal Exchange (NJ CURE).
The CFA and the NJ CURE have recently questioned the basis of the risk-assessment policies of several insurance companies carrying a lot of goodwill in the world market.
These efforts are mainly directed to establish an appeal to the state governments in order to effect a ban on the insurance practices that relate the consumers' eligibility and premium amounts to their educational background and occupation. Some of the notable companies like GEICO have been blamed of charging different rates to people from different professional streams and this has been backed with records of the different quotes offered by the company. This might be very important at throwing some light upon the insurance hazards faced by the minorities, since the minorities mostly occupy the low paid jobs. But then again as we analyze deeper into the problem we have only education and occupation as the factors contributing to GEICO's discriminations. We are yet to track down the other factors, since CFA and NJ CURE are yet to discover them. Once the CFA and NJ CURE have raised interesting questions about the proceedings and intentions of GEICO, they have also submitted the underwriting guidelines of their target to the National Association of Insurance Commissioners (NAIC).
Now, it has become all the more important for us to see if NAIC would consider this argument or dismiss it !
Posted: Sat Jul 21, 2007 09:12 am Post Subject: underwrting
guidelines of good underwriting
Posted: Fri Aug 10, 2007 05:10 pm Post Subject:
Yup... and discriminating based on credit history (read, fiancial backgrounds) should be made illegal also. While all of these things affect the number of claims people file, they don't have one thing to do with exposure or insurance specifically.
Posted: Tue Feb 05, 2008 12:57 am Post Subject:
I don't agree with the credit check thing at all, it should go on your driving history and your past insurance history. If you file a ton of claims then maybe you are a candidate for the higher premium, but what the heck does your credit tell them about your driving history.
About the job issue, don't get that either, so the ones in the lower paying jobs that would have a hard time affording insurance will pay higher rates, ok now that is just crazy.
Discrimination, I would say YES, what is their reasoning for this, would like to hear their reasoning.
Posted: Thu Feb 07, 2008 02:35 pm Post Subject:
I also think that raising the rates for a persons job if dumb. It is hard enough to afford the rates without that .What is even worse is doing the credit check .If you have bad credit you pay higher rates? Ridiculous!Thats like say"You are having a hard time paying your rates so i am going to raise it and make it harder" what a joke. Why not just check on the claims through previous insurance they have had and if it is over a minimum ,THEN put them in high risk .This would be much easier for people to understand than the other stuff.
Posted: Sat Feb 09, 2008 01:07 pm Post Subject:
I agree, thing is what can people do about it?
Posted: Sat Feb 09, 2008 01:12 pm Post Subject:
I also think that raising the rates for a persons job if dumb.
UNLESS we are talking about health, and more importantly life policys.Posted: Sun Feb 10, 2008 02:08 am Post Subject:
Yes, it would make sense to look at a person's job if it was a health policy.But auto? I just got a letter in the mail yesterday from a company I have never heard of for auto insurance.here is a statement on the letter(College Education Discount- From our experience,we know college graduates are better drivers.(says who?) That's why we offer a special discount of up tp 10% if you have a Bachelor's degree.) How rediculous is that? That should be against the law. Sounds like discrimination to me.
Posted: Sun Feb 10, 2008 01:25 pm Post Subject:
College Education Discount- From our experience,we know college graduates are better drivers.(says who?) That's why we offer a special discount of up tp 10% if you have a Bachelor's degree.) How rediculous is that? That should be against the law. Sounds like discrimination to me.
I agree I have a colleged degreed kid and one with a high school dipolma only, the college degreed one is a WAY worse driver than the highschool kid! They won't be hung with discrimination, it's called profiling I think though...or underwriting doubt any problems will arise for them on this....course no question....a person under the age of 25 typically is a lot greater risk (worse driver) than say a fourty or fifty year oldPosted: Sun Feb 10, 2008 02:04 pm Post Subject:
You have to remember that there's not a lot of profit margin (year after year) with auto insurance. Credit record actually is a good indicator of driving.
And I hate to say it, but if it could be proven that people with moles on their left arm were better drivers....then guess what? There would be a discount for it.
It's just a matter of time until there is a surcharge for people who are either going through a divorce or just had one. Their incidence of accident is clearly higher (proven fact). Not that I agree with that.
The top five life changing events are:
Death of a child
Death of spouse
Death of parent or sibling
Divorce
Separation from spouse due to work or marital difficulties
Again, I, personally don't think we should surcharge for these events...but there is a direct correlation between these five and higher incidents of accidents.
Posted: Sun Feb 10, 2008 04:17 pm Post Subject:
That's why we offer a special discount of up tp 10% if you have a Bachelor's degree.) How rediculous is that? That should be against the law. Sounds like discrimination to me.
I see nothing wrong with this and it's different in that its a _discount_, not an increased rate. I have no problem if carriers want to charge a fair rate to many people and offer discounts to others. That is really not discrimination.Credit record actually is a good indicator of driving.
Actually the two have _nothing_ to do with each other and there are _no_ indicators that they do. Give me _1_ example of how these might be related. You won't be able to. What you _might_ say is that this group of people file more claims. That is not being disputed but is not the same thing (see my post above).Yet another state is trying to make rating a policy on credit history illegal.
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