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 Credit
Scoring :
Credit scoring is playing an increasingly
large part in auto and home insurance premium rating.
Insurance companies contend that how a person handles
their personal credit is a good indicator of their level
of responsibility. People who are averse to credit scoring
point out that whether or not a person has good credit
has little to do with the probability of their being
involved in an accident. This issue will continue to
be hotly debated in the Minnesota legislature (as it
has been in other states. If you have feelings one way
or another, let your state legislator know your views. |
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The
9/11 Tragedy:
Although only a few Minnesotans
were directly affected by the 9/11 terrorism tragedy,
insurance companies throughout the world were directly
affected. All insurance companies sign reinsurance treaties
and belong to reinsurance pools. When an unexpected
event causes huge losses, all insurance companies must
contribute. In addition, reinsurance rates for all insurance
companies then increase. This in turn affects the bottom
line and affects the amount that insurance companies
must charge to remain profitable. In a very real way,
all citizens of the United States will help to pay for
the losses caused by this tragedy. |
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Weather;
Hail storms:
Higher than expected occurrences
of tornados, hail, and floods have caused higher than
expected damages to autos. These factors directly affect
auto insurance rates. |
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State
Legislation :
Minnesota is known as a state
whose legislators are concerned about the average citizen.
Over the years, the state has passed legislation that
favors the citizen over large companies. On the one
hand, this is a good and ethical position. On the other
hand, insurers contend that this type of legislation
makes it more difficult for them to make a profit or
to recoup their losses. As a result, several insurance
companies have decided to discontinue writing insurance
in the state. When this happens, the insurance companies
that remain are forced to take up the slack. When insurance
consumers are forced to change insurance companies,
all of their auto related occurrences, as well as their
credit scores are taken into account by the companies
that quote these individuals as "new"
risks. |
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