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May 01, 2007

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I'm learning this lesson the hard way. I did a post on my renter's insurance about a week ago. The bottom line is that as my credit score has dropped, the rate for my renter's insurance has more than doubled. The only saving grace is that auto insurers, at least in Washington State don't check your credit score for renewals; just for the initial policy.

Does anyone know that if this is a hard pull? So if you're shopping around for new car insurance, would this be a hard pull or a soft? Thanks!

I rather think tying rates to credit scores is ridiculous. Credit scores can drop for any number of reasons, such as a divorce. Does a divorce make someone more likely to have an accident? How does foolishly buying a plasma TV and being unable to pay for it increase your odds of crashing into a median?

There may be a correlation between credit scores and accident rates (wait, now renters insurance rates also, huh?) but I don't think its a causal relationship. Might as well start keeping criminal records on people who buy ice cream right? (violence increases as ice cream sales go up, after all)

Your renters insurance doubled because your score lowered? That's just outright gouging, and it makes absolutely no sense. How does it help the insurance companies to price gouge someone with bad credit and probably tight finances? This is not a game of rates determined by the rates of defaults, insurance is pre-paid for the term! If you can't pay at renewal time, your policy just gets canceled. Simple as that. Hike renters insurance rates for people who are already having financial troubles and they're more likely to just not renew. How does that help?

I think the credit-score tie in to insurance is just another way to get more money out of us. They know Americans are deep in debt and are preying on it.

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