How does a credit check on your name affect your insurance

[Semple]

I've just been having this argument with Admiral, as i can't run a quote through their system with my name - it notices you're an existing customer and asks you to call the renewals department.

So having a double-barrelled surname, i left one part out, and ran through the quote with the exact same details as normal. The quote price was a little less than the renewal, so i phoned through to get them to match it. It turns out when they run the quote with the exact same details but just with my actual surname, the quote has gone up £200.

All she could tell me was that it was because a credit check had been done on your name, and a real credit check wouldn't have been done on your "false name". Last time i checked my credit rating, it was good, so i can't understand why the name part is relevant to calculating the cost of a quote? And why the price hike would have been so severe.

 

[Syla5]

Its a bit of a stab in the dark but was the quote based around a pay monthly option? If so the insurance company is effectively financing you the policy, which is where the impact could be, the effective APR % rather then your risk profile.

Or the incorrect name pulled through an address in a much lower risk area?

In fact there could be many reasons, I guess it depends on how much of the credit file the insurers rely on when making their decisions.

 

[Semple]

Its a bit of a stab in the dark but was the quote based around a pay monthly option? If so the insurance company is effectively financing you the policy, which is where the impact could be, the effective APR % rather then your risk profile.

Or the incorrect name pulled through an address in a much lower risk area?

In fact there could be many reasons, I guess it depends on how much of the credit file the insurers rely on when making their decisions.

I could accept that reason if going for a monthly payment as that will be taking out a financial agreement. But nope payment in full.

Both quotes ran with the exact same details to the letter, apart from the surname.

 

[Syla5]

Both quotes ran with the exact same details to the letter, apart from the surname.

This is the key bit here, you don't know how much of the credit file the insurer uses for the purposes of quote automation. The personal information you input might only be used for the insurers system, and the decision making might be purely driven off the credit file plus driving history and no claims etc.

With the incorrect surname the risk could be associated to Mr A Cook at completely different address to you etc compared to Mr A Semple-Cook.

So its entirely feasible to assume that the extent of which they use the credit file is larger then just a credit worthiness check.

 

[paradigm]

In what way is credit-worthiness a measure of risk for a non-financial product (he's paying outright)? That would be as bizzare as my buildings and contents insurance going up because I choose to holiday in the Algarve :/

Sounds like something's amiss to me.

 

[Syla5]

Use of credit file data is not solely limited to credit worthiness, and this is what I am saying, if the address on the credit file is a lower risk then the OP's and the insurance company use this information to determine risk then of course different credit file reports will result in different premium outputs.

 

[geekman]

I've had this argument with them before and IMO they're talking ******** and it's a complete scam. I have a perfect credit rating and always pay my insurance up front so in terms of finances I must be the perfect customer. I suspect the reason they do it is so they can attract genuine new customers with a particularly low price and then make money out of renewals.

 

[Semple]

Use of credit file data is not solely limited to credit worthiness, and this is what I am saying, if the address on the credit file is a lower risk then the OP's and the insurance company use this information to determine risk then of course different credit file reports will result in different premium outputs.

This is what i find hard to understand though.

For a start, why bother asking for an address in the quote if you're going to take the one on my credit file?

Also the address on my credit file is the same as the one entered for the quote with my non-surname. So that shouldn't make any difference... As i say, the quote details are identical apart from one having my real name, and the other having a different name. So what in my credit file would they be using to stack up the price?


For some peace of mind, i ran my details through the usual insurance comparison sites (with my real details), and they're coming up with similar prices.

 

[ChrisD.]

Find another company, never heard great things about the Admiral group when it comes to renewing.

 

[Janesy B]

It's nonsense, just go with another company.

 

[Dr Who]

It's nonsense, just go with another company.

Absolutely this!

 

[Semple]

Unfortunately i haven't found anyone cheaper, so they've got me somewhat over a barrel.

 

[Vanquish-Storm]

Why would the address matter? Why would the credit check search for a random address outside of the one the OP has entered into the quote?

You can use facts and statistics to prove anything is remotely true, its just always in their favour.

Changing the day your policy starts, such as start it on a Tuesday not a Monday can make changes to the premium, its just a massive con really.

At least "Dicky" Turpin wore a mask.

 

[233]

Admiral group in being scammy sods non shocker.

grudgingly accept their quote then fire a complaint off to the insurance ombusman

 

[Marvin]

There's a very strong correlation between credit score and claim frequency & cost. It's fair logic too, lots of insurers are increasingly using credit scoring (whether an individual or a company). Any complaint to the ombudsman will be pointless as it's legitimate.

Vote with your wallet. Or do what I always did with Admiral group - get a quote through Elephant or Diamond which is the same group. I no longer use them though - the only reason I did was because no-one else was competitive.

 

[Haggisman]

I found similar a few years ago when my credit rating was awful; doing quotes with exact same details except for surname gave me some decent quotes; modifying those quotes and changing nothing but the surname to my correct one added 20-30%.

Of course when I mentioned this (thing I posted it on here actually), everyone responded with "they don't use your credit profile, it must be something else"...

Must have been coincidence when after my credit rating improved and a load of defaults dropped off I started getting much better prices...

 

[Vanquish-Storm]

How long until they start asking for eye and hair colour along with height and blood type?

People with brown eyes are 5 times more likely to have accident according to our stats......

 

[Semple]

There's a very strong correlation between credit score and claim frequency & cost. It's fair logic too, lots of insurers are increasingly using credit scoring (whether an individual or a company). Any complaint to the ombudsman will be pointless as it's legitimate.

I could understand the logic if your credit rating was poor, although frankly it's pretty discriminating to assume that if you're bad at paying your bills, you're more likely to be involved in an accident, and thus require a higher premium.

I found similar a few years ago when my credit rating was awful; doing quotes with exact same details except for surname gave me some decent quotes; modifying those quotes and changing nothing but the surname to my correct one added 20-30%.

Of course when I mentioned this (thing I posted it on here actually), everyone responded with "they don't use your credit profile, it must be something else"...

Must have been coincidence when after my credit rating improved and a load of defaults dropped off I started getting much better prices...

I shall be checking my credit file tonight to verify there's no hidden nasties, but last time i checked, my score was up in the very-good range.

 

[Marvin]

I meant to say it's generally a loading for poor credit rating. Insurance is based on the concept of discrimination - that's exactly how the fairest premiums are generated. I suppose we could all be paying >£2k because of the 19 year old with a McLaren and several accidents, parked on the street in central London, but I'd imagine that won't be considered very fair - and rightly so.

Insurance is sadly only going to get considerably more expensive this year with the change in the Ogden rate, so it'll be a good idea to get your cover sorted as soon as you can - it will heavily affect any liability-led book of business (i.e. motor).

I'll do a thread on Ogden I think as it's not been explained well (if at all) by the press so far with poor examples used.

 

[MichaelAwkward]

I've had this argument with them before and IMO they're talking ******** and it's a complete scam. I have a perfect credit rating and always pay my insurance up front so in terms of finances I must be the perfect customer. I suspect the reason they do it is so they can attract genuine new customers with a particularly low price and then make money out of renewals.

I think this highlights what a lot of people misunderstand about credit ratings. Why would you be a perfect customer if they don't make any extra money from you?

I have no idea how they weight and calculate these things, but I'm guessing people with the highest scores aren't necassarily the same people who never pay any interest or charges and always pay in full.