Old Age Suit Update: I Stand Corrected
The Imperative to Live and to Die

Crabby Old Lady, Credit Scores and a John Oliver Treat

Two or three weeks ago, Crabby Old Lady received the bill for renewal of her homeowners coverage. It was up 7.4 percent - too high but not enough to cause heartburn.

However, the accompanying premium for Crabby's auto insurance, due on the same day, shoved her about three miles past horrified: 30 percent greater than six months ago. Huh? No accidents, no other kind of damage or claim. What could be the reason?

When Crabby inquired by telephone at the office of her insurance agent, she got, instead of conversation, an emailed report informing her that a drop in her credit score had caused the increase.

Now before we go a single step further here, let Crabby tell you that she regularly checks her credit score. It is and has been for many years a handful of points below perfect. Now and then it goes up a couple of points or down a couple of points but literally no more than that.

There is a reason Crabby Old Lady has, in difficult times, gone without to pay her bills on time. Into anyone's life some rain will fall. You can count on it. Sometimes it is expensive rain and a superb credit score – particularly if, like Crabby, you have no relatives to fall back on – will get you through the storm. It has saved Crabby's butt more than once over the years.

In a second call to the agent, the only information Crabby could elicit is that the computer made the determination and therefore nothing can change it. (All hail HAL.)

Here are the (so-called) black marks that reduced Crabby's insurance score as assessed by one of the three standard bureaus:

Average Balance on Open Auto Accounts: Not Available; Best possible is $8501-$11,000. (So if you paid cash for your car or even paid the loan regularly, you get marked down if the balance is outside arbitrary parameters?)

Number of Credit Card Accounts on File: 9-23; Best Possible is 4-8. (False. According to the credit report itself, which Crabby downloaded, she has 10 credit cards on file, eight of them closed long ago.)

% of Credit Card Limit Used: 0%-1%: Best Possible is 2%-10%. (Huh? Who makes these rules and based on what? Crabby's use is, as stated, about 1% per month. That's a credit crime?)

Ratio of Open Credit Card Accounts to Total Open Accounts: 61%; Best Possible is 16%-34%. (False. Crabby has two open credit accounts – cards.)

Not a single one of these “reasons” makes the least bit of sense. It's all horsefeathers. Worse, no one at the insurance agent's office had anything to say to Crabby beyond, “it's what the computer said.”

A thirty percent increase is bad enough for anyone but for old people who live on fixed incomes, it can be a disaster. Crabby isn't saying the insurance companies are picking on elders necessarily, but still.

Okay. Enough. Crabby Old Lady is just whinging now and because you have been patient enough to get this far, here is your John Oliver treat several days early.

In a remarkable case of serendipity, last Sunday on Oliver's HBO program, Last Week Tonight, the main essay - as smart and funny as always - was about Credit Reports.

Apparently, you can't fight the credit bureaus but Crabby Old Lady won in the end. Her friend Ken Pyburn sent her to his insurance agent and lo, the new premiums for home and auto coverage identical to last year saved Crabby more than $300 a year. She'll take it and be happy.

Does any of this sound familiar to you?

Comments

I love John Oliver! He gets to the heart of frustrations in such humorous ways you can't help but feel better than someone else understands.

I had the opposite experience with my home owners insurance last month. The bill came and it was $200 less than last year. Same company, supposedly better coverage and I had even had a claim last year so I was expecting an increase. I was sure I was being tricked in some way and I wouldn't be getting the same coverage. My neighborhood is not going down hill, property values are going up. I even went into the agent's office for a side-by-side comparison of polices and I never did get a satisfactory explanation for the change. Makes me feel as if I've either been paying $200 too much in past years or they really are tricking me and I'm getting to old to spot it.

No increases to the extent you incurred but both my homeowners and automobile insurance in general increase on average about 3% per year. Obviously the higher your premiums become the more noticeable increases become. When I contacted my agent this past year after becoming concerned with continuous increases in my auto insurance and being with the company some 50 years and accident free, I asked why, why all these quite irritating increases. Their reply was that it all had to do with their costs in pay outs on policy claims. In other words, even though you and I don't receive a 3% cost of living raise each year.... they do and we pay it! Their costs go up and their responsible clients foot the bill!

I wonder if the variable was your recent 75th birthday?

My credit score recently fell. I get regular reports on my credit score and other factors due to the fact I had my identity stolen a few years ago. Now, anyone who looks at my credit ratings is reported to me along with all sorts of information. The reason for the fall: no outstanding long-term credit. In other words, I was being demoted, credit-wise, due to the fact my home and cars are paid for. Seems about as odd as some of those reasons for your lowered score.

I watched the whole thing. Don't get HBO but he looks amazing. Yes, credit reports are a problem for many. Stupid really. Thanks for shring this.

VERY good information! I always feel powerless over insurance premium increases. Another lesson today is "scout around" for a better deal. Thanks!

Yes it sounds familiar! After I retired I finally had time to get new bids on insurance. We could not believe how our premiums, on which we never made a claim, crept up over the years.

Best to get an independent agent who can shop around for you. Check it every three years or so.

That said, insurance IS a shared risk situation. Years when there are storms that tear roofs off in a region, everyone sees an increase in home owners insurance. As the speed limits have risen, leading to more fatal accidents, we all contribute to the payouts.

FYI, some companies, like Allstate, have a device you can install in your vehicle to track your driving. Ours reduces an already low rate due to our safe a d limited driving.

I learned that closing accounts is a bad thing. Apparently you should have lots of credit cards i.e. lots of credit floating around out there. You also have to use them all, and pay them all off each month. Who knew? I thought having one or two bills would be easier, better. Luckily that was some years ago and those closed accounts are disappearing. Knock on wood my score stays high.

That kind of rate increase on your auto insurance would have had me shopping for someone else.

A year after my roof was devastated by hail (2 years ag0) and the insurance covered it, my home insurance premium just about doubled. I said adios to them and found another for about the same rate I was already paying.

Sadly we just had another hail storm here on Monday and though my roof doesn't appear to have suffered much, in other areas around me it was pretty devastating so, because I share rates with those in my area, my rates will likely sky rocket again in about a year or less. Whenever their fiscal year ends and begins I guess.

My auto insurance went up about 7% this year and royally ticked me off. Unlike Crabby - I did nothing about it as I have been up to my neck in issues around settling my husband's estate - just now finishing that up.
Once I recover my sanity from that I will take on the auto insurance -and perhaps change agents - or companies -or downgrade my insurance - I have a car and a truck - the truck is driven about 1000miles a year - but I am not ready to get rid of it yet.
thanks for the reminder that I need to check into this - one more irritation on the bumpy road of old age.

Thanks, Crabby. I've been f'ed over by these barracudas twice in my life. I'm ready for a violent revolution.

- Nasty Old Man

That's very vigilant of you!!!
Our auto insurance was Liberty mutual. Our insurance premium must had been increased 30% per year for 10+ years(without accidents or tickets). DH was handling/paying the insurance. I saw the premium $2,900 and thought it was high on 2012. I called Liberty Mutual hoping to reduce $500, the person answered the phone yelled at me.
We switched to NJ manufacture, same policy $1,200 a year for three years, one accident(DH's fault) in 2013 and was forgiven insurance premium wise.
some insurance company try to take advantage of old ignorant people according to dr Google.

I think these mega companies have a room full of financial experts looking for ways to zap the clients for a few bucks (to them) more, because multiplied by number of policy holders it amounts to a big increase on the profit side of the ledger.

Ever notice how the banks have added charges for all sorts of things that you didn't have to pay for before? The customer is no longer right.

And old people sometimes just don't have the energy to deal with this kind of dishonest (if not illegal) practices and they know it. If they can get by with unfair charges and increase their profit margin they will try. If someone takes them to court it doesn't cost as much to settle a claim as they make on the sly overcharges.

Good for you, Ronni, for not letting them get away with it without a fight.

We are now ruled by the .01% of the obscenely wealthy. And that goes for big companies as well as individual. This is a soap box issue for me.

The credit score business is really outrageous. I've gotten dinged more that once because I bought a car and late refinanced it to reduce my payment. By doing that I was able to pay off the car more quickly. How on earth can that suggest that I'm not responsible in my use of credit?

John Oliver's report on credit unions was exceptional, especially the interviews with victims and journalists.

I was told by my auto insurance company a few years ago that the reason for my premium increase was : Age. Yep, every year as I get another year older, up goes the premium. Also, the rep told me that if auto thefts or break-ins increase in my neighborhood area, up goes the premium. And yes, even a slight reduction in credit rating score, even if still excellent score. My credit score just fell almost a hundred points and is still excellent.

What Darlene said. 10/10

A few years ago when I bought a new car, the insurance increased dramatically. Of course a new car would cost more to insure than the old car it replaced. But the next year when the new car got a year older, the rate went up again. The reason? "New car discount expired." Sheesh. I'm accident-free, ticket-free, and drive about 2,500 miles a year. But I still can't win.

And a couple of years ago when my home insurance spiked the reason I was given was all the claims from forest fires in the state that year. At least that I could understand, even though I live 50 miles from the nearest forest.

I don't know about credit scores in Australia affecting your insurance premium, but I got my car insurance renewal bill recently and it was up about 10% on last year's. I got on their website and did an online quote which worked out to be a bit less than what I paid last year. I rang them, informed them of it, and they let me pay the lesser amount I'd been quoted online. It's called the 'lazy tax' when insurance companies up your insurance because most people can't be bothered to shop around and question their premiums.

And they say there is no inflation?!? My credit score has also gone down 20 points or so in the last few months, for no apparent reason. It's disconcerting to know we are being ruled by machines and algorithms produced in faraway corporate suites and by faceless government bureaucracies.

"One way or another, there gonna gitcha"

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