Supreme Court Agrees to Hear Insurance Credit Score Cases

Thursday, January 18th, 2007

The U.S. Supreme Court has agreed to hear a case on insurers’ use of credit reports to affect the rates consumers pay for their insurance. Many insurance companies, including Geico, Progressive, Allstate and Ensurance use credit scoring as a factor in the price they charge for their insurance. A bad credit score can have a larger impact on the price you pay for insurance than multiple tickets. Many consumers are unaware of just how large the impact can be on the price they pay Delaware Insurance Commissioner Matt Denn has taken arguments against insurance industry use of credit scoring to the U.S. Supreme Court, filing a brief in a pending case involving the practice.Denn recruited 12 other state insurance commissioners to join Delaware in filing the brief.Denn’s amicus curiae, or “friend of the court,” brief was filed last Monday with the Supreme Court in Washington, D.C. in the cases of Safeco v. Burr and GEICO v. Edo.The brief urges the Supreme Court to uphold the decisions of the 9th Circuit Court of Appeals in the Safeco and GEICO cases that the companies willfully disregarded the FCRA by not sending adverse action notices to some consumers.Consumers in the cases claim that insurance companies Safeco and GEICO violated the federal Fair Credit Reporting Act. The consumers said that when a consumer’s credit information resulted in the consumer receiving a higher rate, insurers should have sent out “adverse action notices” required under FCRA and acted in “willful” disregard of the FCRA in not doing so.. ”I will continue to support legislation that would prohibit the use of credit scoring in auto and homeowners insurance, but I also thought it important to weigh in on this case,” Denn said. “As long as our law allows insurance companies to use credit scoring, consumers deserve to know when something in their credit score has resulted in them getting higher rates.”Safeco Insurance Co. of America, GEICO General Insurance Co., disagree that they should have notified people about adverse information in their credit reports.
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Many consumer groups contend that “Running credit scores” is tantamount to “Red lining.” That people who can least afford it are being charged more for the same coverage, even though they have equal driving records, and might be accident free. “Geico bumped up my rate over $300 because of my credit”. “I could understand if I had claims, but I haven’t cost an insurance company dollar one in over 8 years” said James Wilson of Harvey. Illinois.

We at Urban Insurance Agency agree, that Is why we offer insurance without credit scoring.

The high court combined Safeco Insurance v. Burr, 06-84 and GEICO General Insurance v. Edo, 06-100Source: Delaware Insurance Commissioner

Punitive Damages Awarded in Katrina Case

Saturday, January 13th, 2007

Larry Lubell

Thursday, a jury on awarded $2.5 million in punitive damages to Norman and Genevieve Broussard a couple who sued State Farm Fire & Casualty Co. for denying their claim after Hurricane Katrina. This decision could assist hundreds of other homeowners in their attempts to force insurers to cover billions of dollars in storm damage. U.S. District Judge L.T. Senter’s earlier rulings in other Katrina cases have favored the insurance industry, but this decision goes to the heart of the objection companies have use to refuse to cover billions of dollars in damage from Katrina’s storm surge. After he explained his ruling, Senter ordered a recess to give attorneys time “to get over the shock.” After the jury announced its award, the Broussards left the courthouse arm in arm. “It’s a great day for South Mississippi,” Norman Broussard said.
The Broussards claimed that a tornado during the hurricane destroyed their home. State Farm blamed all the damage on Katrina’s storm surge.
State Farm and other insurers say their homeowner policies are written to cover damage from wind but not from water. That flooding and storm surge are excluded as part of homeowners policy even though those policies were sold as covering Hurricanes, even if hurricane-force winds preceded a storm’s rising water. In fact, after State Farm and other companies writing property insurance in Florida, suffered catastrophic losses after Hurricane Andrew, they dramatically altered the terms of their polices. In addition to increasing deductibles, they divided up the destructive force of a hurricane into two parts. One is wind, which is covered, and second is the water surge, which is not. It is for this reason that immediately after Katrina you heard Insurance companies talking about the “Great Flood of 2005.” Flood insurance is offered on a separate policy. Property coverage can be tricky, since there are often exclusions that might not always seem obvious or intuitive. It is always a good idea to review your coverage with an insurance professional.
The judge ruled that State Farm couldn’t prove that Katrina’s storm surge was responsible for all of the damage to the Broussards’ home. The judge also said the testimony failed to establish how much damage was caused by wind and how much resulted from storm surge.
State Farm spokesman Phil Supple said after the jury’s verdict that the company is likely to appeal the decision. “We are surprised and disappointed by both the judge’s ruling on the coverage issues and the amount awarded by the jury for punitive damages,” he said in a written statement. “We believe the expert testimony supported a different result.”

Property coverage can be tricky, since there are often exclusions that might not always seem obvious or intuitive. It is always a good idea to review your coverage with an insurance professional.

Call us at 800-680-0707 for a free review.
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Medi-car Insurance

Thursday, January 25th, 2007

Urban Insurance is happy to announce that we offer Medi-car service insurance at the lowest prices in the Chicago Metropolitan area. With health costs skyrocketing, an ever-increasing number of medical procedures are being preformed on an “Out Patient” basis. As a result, today many people find them selves in need of transportation to and from medical appointments. Many of these people are unable to drive them selves, and are not able, or do not wish to ask a friend or family member to take them. In many cases the patient might be in a wheel chair or have needs that require a specially equipped van. Among one of the more common needs for Medi-car services are the approximately 217,000 Americans who receive ongoing dialysis treatments. Also seniors find them selves with on-going medical services and few options for how to make the trip.This is where non-emergency transportation service is used. It provides for the livery service of wheelchair patients/customers and people with special needs but who do not require an Ambulance or highly trained medical teams. The cost of emergency ambulance service is very costly and is only an option when minutes can save lives. Medicar vehicles are often equipped with side-loading hydraulic lifts, ramps and special wheelchair locks and floor straps to secure the passenger in the vehicle.

Urban Insurance Agency, has been serving the commercial Auto customer for more than 40 years. We offer several different companies so we can search for the best price available.
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