Measure 42

November 2, 2006 at 4:34 pm Leave a comment

It’s just a few days before voting day, and, like you, I’m sick and tired of all of the political garbage littering my t.v. I can’t wait for it to be over.

Of course, if you’ve been paying any attention to what’s going on in Oregon, you’re well aware of Measure 42. Maybe not by name, but definitely from conversation.

Measure 42, if passed, would prevent insurance companies from setting rates based on credit scores.  I’m not a big fan of credit, so it would be safe to assume that I would support this legislation. I’ll tell you why.

First and foremost, according to insurance industry research , there is a correlation between poor credit scores and possibility of payment. Basically, there’s a probability that an individual will not pay their insurance premiums if they have poor credit scores. I believe the percentage is around 54% or so.

So, I think it’s wise for insurers to use credit scores as a part of determining rates. However, I think it’s idiotic to set rates based SOLELY on credit scores. Major mortgage companies look at other factors before approving loans, so why are insurance companies excempt? They shouldn’t be.

I believe this practice is harmful to consumers because it doesn’t discriminate from individuals who don’t pay their bills and those who just don’t borrow money. To place just those two groups in the same category is just plain stupid.

Insurance is an essential part of your financial plan, that’s why I think these companies should look at other aspects of an applicant’s history. Don’t you think it would be wise to look at the claims history? Yes. What about the amount of time the person has had insurance and on what? Yes.

Unfortunately, I live in the Midwest and can’t vote on this legislation. But, if I had the opportunity, I’d write it in big, red letters: Y-E-S!

Maybe I’m wrong, maybe I’m not, what do you guys think?

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Entry filed under: Insurance.

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