- Report: #410020
Complaint Review: American Family Insurance - Madison Wisconsin
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American Family Insurance
6000 American Parkway Madison, 53777-0001 Wisconsin, U.S.A.
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American Family Insurance Big Insurance Company using non-risk related credit scores to charge higher premiums Madison Wisconsin
Without my express permission my automobile insurance company increased my premium for 2008 per my new bill received in January. I was informed the increase in my rate was due to my credit score.
I never had a claim with this company, always paid my bills to them and I have been with them for nearly 20 years - the agent has been a freind of mine since college! I have never filed for bankruptcy nor have I lost a home.
Although states allow the use of credit scores to assess premiums, and Missouri does as long as customers are notified of the use (I was given a 30 day notice in November), it seems odd they are not required to get our permission to access our credit histories. In addition, many of us will have poor credit histories, especially as we loose jobs or have to take low paying jobs in a terrible economy.
Further, credit histories cover many financial relationships a consumer has with various lenders. That one is late on a credit card balance or school loan does not correlate with risk in driving an automobile. If the company wants to look at financial ability to pay premiums, it should look only at the specifcic track record the client has with the company, not with unrelated third parties.
P. xxxxxxxxxx
St. Louis, Missouri
U.S.A.
CLICK here to see why Rip-off Report, as a matter of policy, deleted either a phone number, link or e-mail address from this Report.
I never had a claim with this company, always paid my bills to them and I have been with them for nearly 20 years - the agent has been a freind of mine since college! I have never filed for bankruptcy nor have I lost a home.
Although states allow the use of credit scores to assess premiums, and Missouri does as long as customers are notified of the use (I was given a 30 day notice in November), it seems odd they are not required to get our permission to access our credit histories. In addition, many of us will have poor credit histories, especially as we loose jobs or have to take low paying jobs in a terrible economy.
Further, credit histories cover many financial relationships a consumer has with various lenders. That one is late on a credit card balance or school loan does not correlate with risk in driving an automobile. If the company wants to look at financial ability to pay premiums, it should look only at the specifcic track record the client has with the company, not with unrelated third parties.
P. xxxxxxxxxx
St. Louis, Missouri
U.S.A.
CLICK here to see why Rip-off Report, as a matter of policy, deleted either a phone number, link or e-mail address from this Report.
2 Updates & Rebuttals
hollywood
Hobart,Indiana,
United States of America
American Family Insurance Rates Raised Low Credit Score
#2Consumer Suggestion
Tue, October 18, 2011
Unless I'm misunderstanding this definition, I belive it to be true. and that is the defintion of extortion extortion noun
1. an act or instance of extorting.
2. Law . the crime of obtaining money or some other thing of value by the abuse of one's office or authority.
3. oppressive or illegal exaction, as of excessive price or interest: the extortions of usurers.
4. anything extorted.
So if someone falls on hard times and there credit score drops and because of this you increase my premiums, that is not extortion?
Flynrider
Phoeix,Arizona,
U.S.A.
What did they do wrong?
#3Consumer Comment
Sat, January 10, 2009
According to your report, the company abided by Missouri rules and notified you before using your credit score to determine your premium. You said, "it seems odd they are not required to get our permission to access our credit histories." They did not access your credit history. They merely ordered a FICO score, which is just a number based on your credit information that is compiled by a third party. "That one is late on a credit card balance or school loan does not correlate with risk in driving an automobile." You'd be wrong there. The main reason that insurers access your credit score is that there is a significant actuarial link between a person's credit history and the liklihood that they will be involved in a claim payout. Insurance is based entirely on statistics. While you personally may not be more likely to file a claim, a significant percentage of the folks that share your credit rating are more likely to file a claim. This is common in all types of insurance. Things that you personally cannot control, such your age, your neighbor's driving habits, your local crime rate all go into determining the rate you will ultimately pay. The credit score is just one more bit of info that goes into the actuarial bucket.
