Let's talk about insurance in general

A true story that made me think...

My son and his girlfriend have recently gotten a place of their own and my son purchased a used car for his girlfriend to drive. Naturally, with the purchase of the new vehicle came the need for insurance on that vehicle.  Now the two of them have some credit dings as a result of life in general that are about 3-4 years behind them now and they are doing well now keeping their act together.

So, they went looking for a quote for auto insurance for the new "used" vehicle. Now let me just say the vehicle in question is a 1999 VW Golf, not a Lincoln Navigator!!  The quotes that they are getting are absolutely obscene!  They have gotten several different answers as to the reason behind the ridiculous cost and have been told that credit has been a factor among other equally idiotic answers.  Neither of them have ever had an accident or been a party to a law suit relating to an automobile accident.  So that got me  to thinking..... never a good thing on a gloomy Monday :)

What if in the title business we were able to write a policy of title insurance based on the assinine criteria being utilized by the other carriers of various insurances?  What if we had to base our premiums on such things as credit scores, how many times you moved, where you live, whether or not you have ever been a party to a lawsuit (plaintiff or defendant) and any other crazy thing you can think of.  Man life would be GOOD!!!  Can you imagine the amount of raping and pilaging we could get away with LEGALLY!!! ????

Just think it through, lenders use credit scores, auto insurance companies use credit scores as do some employers I am told, among other things in order to offer you an insurance quote or a job.  Now given the recent state of the economy and given the fact that some good people are being put in bad positions through no fault of their own does this make a lick of sense?  No, it doesn't. 

Let's take a good look at this- you get laid off, you get onto unemployment which pays, what, 1/3 of what your salary might have been? You get behind on your bills, your credit score suffers.  You get evicted from your apartment and have to move to another apartment, and on and on and on it goes.  So now you go to look for a new job, the employer says "Oh, you are very qualified, but given the fact that you have credit issues, you moved recently and we see that you were evicted we can't offer you a job."  Ok, so now you are stuck on enemployment or working at a low-level job usually reserved for high school kids.

Take it to the next phase, you run out of money, your insurance lapses because you can't find a good job, you get a penalty from the state because your insurance lapsed thus causing you to pay out more money and you try desperately to find affordable auto insurance, only to be told, "well we can insure you of course, for the cost of college tuition at an Ivy League school"!!  Seriously????

If we were able to get away with that kind of crazy business, I could send my grandaughters to an Ivy League school and pay cash for their education.!!   

Now how would we go about pricing our product in such an enviromment?  Would we charge the base fees as are currently set by our state (we are a filed rate state) and then from that point put our add on's for all of the ridiculous variables.  Let's face it, if you have credit dings, you've lost your job in the past and been made to move from one place to another and then FINALLY you are in a position to buy your own home, thus making it necessary to buy title insurance, you must absolutely be considered a bad risk due to these past factors.  It is only natural that if you have these type issues you will be a more litigious person and will most certainly be out combing the land records, doing your own survey or playing detective looking for forgeries so that you can file a title claim and get "something for nothing", thus making us all feel a little better for having raped you, RIGHT?  

Can you imagine trying to start a grass roots effort to have our rates come in line with those of the other insurance carriers out there?  We would certainly not get any sympathy from legislators or the public now would we?

We offer a very good product and many, many times a day I am made to answer the question, well do I need that insurance, it's awfully expensive.   REALLY, not in the grand scheme of things, IT COULD BE WORSE!!