Auto Insurance hikes

[Gman]

Your insurance costs can vary based on changes in your credit rating. That just seems crazy to me, but maybe I don't understand the logic there.

[kidicarus13]

Your insurance costs can vary based on changes in your credit rating. That just seems crazy to me, but maybe I don't understand the logic there.

I am not in the insurance industry but... it seems logical to me that people that make sound financial decisions (as indicated by a higher credit score) may also make better decisions while operating a vehicle, therefore having fewer accidents and having fewer insurance claims.

[Ronin13]

I am not in the insurance industry but... it seems logical to me that people that make sound financial decisions (as indicated by a higher credit score) may also make better decisions while operating a vehicle, therefore having fewer accidents and having fewer insurance claims.

Let's not forget that it's indicative that they pay their bills... hopefully on time. Nothing worse for an insurance company (or agent) when someone fails to pay their premium and allows their coverage to lapse.

[Irving]

I am not in the insurance industry but... it seems logical to me that people that make sound financial decisions (as indicated by a higher credit score) may also make better decisions while operating a vehicle, therefore having fewer accidents and having fewer insurance claims.

It's more about sound financial decisions relating to less likelihood to turn in claims all the time. If there were no deductibles, people would turn in a claim for every door ding and bumper scratch. You can already see that with people who turn in claims for windshields.

[hollohas]

You can already see that with people who turn in claims for windshields.

Filing a claim for a windshield never made sense to me.

[Irving]

People do it because it's "free," but it's only free because the policy has already worked in that cost, so you're paying for a new windshield via your policy, whether you want to or not.

[muddywings]

Filing a claim for a windshield never made sense to me.

Just out of curiosity, why? If you pay for a service (comprehensive coverage) and your windshield is more than your deductible, why not use your insurance? It doesn't hurt your premiums (unless you are caught doing it at an abnormal rate).

[hollohas]

Just out of curiosity, why? If you pay for a service (comprehensive coverage) and your windshield is more than your deductible, why not use your insurance? It doesn't hurt your premiums (unless you are caught doing it at an abnormal rate).

They are less than my deductible.

[Irving]

Just out of curiosity, why? If you pay for a service (comprehensive coverage) and your windshield is more than your deductible, why not use your insurance? It doesn't hurt your premiums (unless you are caught doing it at an abnormal rate).

It costs more to have that feature in the first place, so you're paying for it whether you're using it. While Colorado state law says that insurance companies cannot raise your rates for having a specific comp claim, you can bet that they are generally raising rates on a regional scale if people are filing claims. The more people making claims, the more money that costs insurance companies.

More importantly, IMO, when you go to shop insurance, the new company is going to pull your CLUE report to see your claim history and drop you into a certain tier, just like everyone is placed in different tiers based on credit score. So if you have two people with exactly the same credit score, but Guy A has a comp claim, and Guy B has zero claims, Guy B will be put into a No Claims tier, while Guy A gets put into a higher premium tier because he has a claim. The insurance company will then look to see if the claim was an at-fault claim, or just a comp claim, or not-at fault or whatever, and place Guy A into the appropriate tier for having a comp claim as opposed to an at-fault accident.

Now look at the situation if Guy A has been getting his windshield replaced every year because "Hey it's free!" When he goes to shop for a better insurance rate, every company he shops is going to see that "Holy shit! This guy has had 8 claims over the past 10 years!" That is going to affect what you pay.

The same goes for filing home owners claims. In situations where someone files a claim, but whatever they filed for isn't covered, or is below their deductible, the claim is closed as "no payment made." In the short term, the company does not raise your rate for having filed that specific claim, but if you ever shop insurance the new company just sees that you filed a home owners claim and they don't care whether anything was actually paid out or not.

[muddywings]

It costs more to have that feature in the first place, so you're paying for it whether you're using it. While Colorado state law says that insurance companies cannot raise your rates for having a specific comp claim, you can bet that they are generally raising rates on a regional scale if people are filing claims. The more people making claims, the more money that costs insurance companies.

More importantly, IMO, when you go to shop insurance, the new company is going to pull your CLUE report to see your claim history and drop you into a certain tier, just like everyone is placed in different tiers based on credit score. So if you have two people with exactly the same credit score, but Guy A has a comp claim, and Guy B has zero claims, Guy B will be put into a No Claims tier, while Guy A gets put into a higher premium tier because he has a claim. The insurance company will then look to see if the claim was an at-fault claim, or just a comp claim, or not-at fault or whatever, and place Guy A into the appropriate tier for having a comp claim as opposed to an at-fault accident.

Now look at the situation if Guy A has been getting his windshield replaced every year because "Hey it's free!" When he goes to shop for a better insurance rate, every company he shops is going to see that "Holy shit! This guy has had 8 claims over the past 10 years!" That is going to affect what you pay.

The same goes for filing home owners claims. In situations where someone files a claim, but whatever they filed for isn't covered, or is below their deductible, the claim is closed as "no payment made." In the short term, the company does not raise your rate for having filed that specific claim, but if you ever shop insurance the new company just sees that you filed a home owners claim and they don't care whether anything was actually paid out or not.

As a former Associate Claim Adjuster for USAA-all true. I just took his broad statement and assumed he had a low comp deductible but wan't using it on a pricey windshield. If he calls in for a windshield replacement on a 10 year old car with a $1000 deductible, the insurance rep is just going tell him, 'your policy doesn't have enough coverage and sorry we can't help you but I would recommend Safelite (or one of our other preferred shops).'
If someone is claiming a new windshield once a year Underwriting will probably evaluate his policy and will raise rates regardless if he is a new customer or not. They'll look at if he is driving on dirt roads (is his house 5 miles on a dirt road or does he have some odd commute to work daily) and adjust accordingly. Or it will go to fraud prevention especially if he isn't using their standard windshield service like Safelite.
However, i see a lot of people not using their insurance even though they are paying for it. ie: free chip repair when they have comp coverage. Or what I assumed, was he had a $250 deductible on a $500 windshield and he hasn't used his comp coverage in years. You're paying for coverage and a service-use it. I haven't hesitated to use my comp coverage in hopes that others would also not use theirs in hopes of keeping Colorado rates low. (thats a lot of hoping and its not going to happen IMHO). In 10 years in CO I've replaced two windshields and wouldn't hesitate to use my comp coverage again if it saved me money.
IMHO