Did you think that Repblicans had run out of ways to soak the poor? Well, guess again.This article, which appeared in yesterday's Atlanta Journal Constitution describes how Republican State Representative Rich Golick sponsored a bill to allow insurance companies to use credit scores to set automobile and homeowner's insurance rates. The bill sailed through the Republican dominated legislature. What does your credit score have to do with your likelyhood of having an accident? Good question.
Like most people, Golick couldn't then — and can't now — explain the connection. Why would information about credit card bills and mortgage payments predict someone's driving habits?"I work in this business. It is not obvious to me," said Golick, who in addition to his legislative job is an attorney for Allstate Insurance Co. "I do know that the data is conclusive that there is absolutely a correlation."
All Mr. Golick can tell you is that that insurance companies can predict which customers will file be likely to file a claim by feeding their credit data through a complex and often secret computer program, and he thinks they should have the right to do so.
While the method may be mysterious, the results are shockingly clear. Insurance companies which use the credit score to help determine rates charge those with the lowest score nearly twice as much for the same coverage as they do those with the highest score:
Drive Insurance from Progressive would charge a 40-year-old Atlanta man with a 2000 Ford Taurus and a clean driving record $387 for a six-month policy if he had the best insurance score, compared with $710 if he had the worst.
So, if you're having a hard time paying your bills, it's only right that you pay more for insurance that makes it possible for you to get to your job than someone who is doing well. And if that higher insurance premium means that you get further behind on your bills and your credit score gets worse, it's your own fault for not having a better credit score. We all know that credit rating companies never make mistakes, and if they do, it's really easy to get them corrected. This is America, Buddy, and if you're poor, it's your lot in life pay more so the rich can get richer.