epoch said:
There's a guy here that is an insurance rep ... I forget who it is. I'm sure he'll pop in and shed some light on this situation.
Thats me. I don't handle personal insurance, so I may be slightly off in my understanding of the credit/insurance scoring thing, but I'll give it my best shot.
First off, your agents are doing themselves a big disservice describing the scoring as a credit score. It is actually an insurance score that incorporates credit and claims history. Each different carrier weighs the different components differently, which makes it about impossible to fully decipher.
The theory behind the insurance scoring is credit based in that some guys sitting around with nothing better to do came up with stacks and stacks of information that shows a correlation between credit score and claims frequency (lower credit, more claims). The information was apparently sound enough to get it through each state's respective Office of Insurance and Financial Services (Insurance Commissioner) and incorporated into their published rates.
Myself, I find it to be a load of crap. Trouble is, the process has been in place for the past few years and if they were to totally repeal the practice, it would entail everyone's rates increasing, as the carriers will collect the $ the actuaries say is required, regardless of who or how they obtain it.