Are credit-based insurance rates the new insurance scam?
Remember, the insurance company is trying to measure something totally different from a lender. A lender wants to know whether they will get paid back; the insurance company wants to know whether you will have an accident. So naturally the scoring model is different. (There are different FICO scoring models for three different types of lending already.) I don’t know how exactly the insurance credit score correlates to claims, but it must. Insurance companies have to pay the credit bureau for each score, and they wouldn’t do that if they weren’t certain to, on average, save more than they are paying.
