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Go
to the bottom of this page for access to
previous
Press Releases. |
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| Letter
to Dallas Morning News |
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The
report “Credit history boosts
insurance premiums” (April 27) gives
no reason for the correlation of auto
insurance claims with credit. But
households with credit problems tend to
economize on premiums by selling one car
and driving the other more. What credit
history detects is a group that averages
more miles and more claims per car.
Thus, credit merely serves as a proxy
odometer.
If insurers used real odometers as Texas
law allows, households that need two
cars could keep both but drive each
fewer miles and get proportional
savings. For how this would work, visit: www.centspermilenow.org
.
Patrick Butler
CentsPerMileNow Project
National Organization for Women and
Texas NOW, Austin
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| Letter
to The Insurance Journal, Texas |
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In
the review “Giving Credit Where Credit
Is Due” (April 29), neither defenders
nor opponents of credit pricing of
automobile insurance offer any reason
that is not moralistic for the
correlation between credit record and
number of claims per car year.
In fact, the correlation is merely the
inevitable result of today’s crude
practice of selling insurance by the car
year. This practice strongly induces
families with two cars and a need to
economize to sacrifice one car and put
all of their miles on the other.
Credit thus serves as a proxy odometer
that “measures” the average effect
of reducing car ownership to save on
insurance.
Customers are right to be angry. As an
artifact of car-year pricing and the
strategies this pricing forces drivers
to use, the credit correlation would
disappear if insurers used real
odometers as Texas law permits. To see
how this works, visit: www.centspermilenow.org
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Patrick Butler, Director
CentsPerMileNow Insurance Project
National Organization for Women
Washington DC and Austin Texas
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