policyholders are well aware a hurricane is guaranteed to hike insurance rates, but fewer realize their credit reports also are factored into homeowner and automobile insurance premiums.
Consumers who have suffered financial setbacks because of the economy are seeing higher homeowner and auto insurance premiums, but the mistakes often found in credit reports also can lead to rate hikes.
Even Mississippi Insurance Commissioner Mike Chaney said that he recently faced a 10 percent increase in his Safeco auto insurance rate because of an error on the insurer’s part.
He said his rate was corrected when he questioned the charge, based on his credit history.
“The bottom line was, when we got down to it, they had rated me a credit risk because the agent had checked that I was eligible to pay on installment,” said Chaney, who pays his premiums in a lump sum. “My credit history is very good because I have a thin credit file, very little credit.”
Insurance companies contend consumers with bad credit tend to file more property insurance claims. Consumer advocates question the accuracy of studies that find a correlation between credit and risk. They also argue the industry should stick with more relevant risk indicators, such as claims history and the condition of property being insured.
The debate is attracting more attention as a bad economy affects consumer credit and also has consumers scrutinizing their expenses.
Chaney sides with consumer advocates who believe insurance companies use credit histories to cherry pick customers and charge higher premiums. The commissioner said credit information in some cases allows insurance companies to raise premiums without a state-approved rate increase.
“It’s a serious game for them,” Chaney said. “It’s always about money.”
Insurers defend their use of credit reports to develop insurance scores, which dates to the mid-1990s.
They cite a 2007 Federal Trade Commission study that found credit-based insurance scores do predict risk for automobile policies. Studies sponsored by insurance companies, and the state of Texas, have reached similar conclusions.
Insurance companies point out that customers with good credit are rewarded with lower premiums. They view rates partly based on credit as an equitable way to set premiums.
“If you’re conservative with your finances, you manage your finances and credit well, typically, you’re also going to be an individual who is less likely to be involved in an accident,” said Robert Hartwig, who heads the industry’s nonprofit Insurance Information Institute. “You’re going to be someone who is more likely to obey speed limits. You’re going to be someone who is less likely to drive impaired. You’re going to be less likely to be someone who fails to perform maintenance on your car.
Friday, January 29, 2010
Scale of China's export credit insurance and guarantee up over 80%
China Exports & Credit Insurance Corporation (Sinosure) completed 11.66 billion U.S. dollars worth of insurance and guarantee business in 2009 amid a severe international trade situation, an increase of 85.8 percent year-on-year.
Of them, short-term export credit insurance policies amounted to 90.27 billion U.S. dollars, representing 2.2 times that in 2008, and not only meeting but exceeding the target of 84 billion U.S. dollars set in national policies ahead of schedule.
In 2009, the proportion of exports covered by export credit insurance to total exports rose significantly, with the export credit insurance coverage on the general export trade reaching 18.6 percent, 12.1 percentage points higher than that of 2008.
The support given to exports by major industries or exports to emerging markets has achieved new progress, helping enterprises export 49.15 billion U.S. dollars of goods to emerging markets such as Africa, Latin America and Central and Eastern Europe, up 114.1 percent year-on-year.
The results of the support to help enterprises seize orders and maintain market shares are emerging. Regarding the problems that "enterprises were afraid to receive orders," Sinosure issued more short-term export credit insurance policies, with the amount of 30-day or longer export credit insurance policies rising by 144.9 percent in 2009. Regarding the problems that "enterprises lack the financial capacities to receive orders," Sinosure actively issued export credit insurance policies to help enterprises secure trade financing totaling more than 160 billion yuan.
Of them, short-term export credit insurance policies amounted to 90.27 billion U.S. dollars, representing 2.2 times that in 2008, and not only meeting but exceeding the target of 84 billion U.S. dollars set in national policies ahead of schedule.
In 2009, the proportion of exports covered by export credit insurance to total exports rose significantly, with the export credit insurance coverage on the general export trade reaching 18.6 percent, 12.1 percentage points higher than that of 2008.
The support given to exports by major industries or exports to emerging markets has achieved new progress, helping enterprises export 49.15 billion U.S. dollars of goods to emerging markets such as Africa, Latin America and Central and Eastern Europe, up 114.1 percent year-on-year.
The results of the support to help enterprises seize orders and maintain market shares are emerging. Regarding the problems that "enterprises were afraid to receive orders," Sinosure issued more short-term export credit insurance policies, with the amount of 30-day or longer export credit insurance policies rising by 144.9 percent in 2009. Regarding the problems that "enterprises lack the financial capacities to receive orders," Sinosure actively issued export credit insurance policies to help enterprises secure trade financing totaling more than 160 billion yuan.
Sunday, January 10, 2010
EU Approves Austrian Short-Term Export Credit Insurance Plan
BRUSSELS (Dow Jones)--The European Commission Thursday cleared the Austrian government to provide export credit insurance to help countries unable to find coverage from private sources.
The government scheme, which is cleared to run until the end of 2010, is designed to help Austrian exporters cope with the fallout from the financial crisis.
The commission, the European Union's regulatory arm, has cleared similar measures for other countries in the bloc.
The government scheme, which is cleared to run until the end of 2010, is designed to help Austrian exporters cope with the fallout from the financial crisis.
The commission, the European Union's regulatory arm, has cleared similar measures for other countries in the bloc.
Call Your Lender and Strike a Deal
Got credit card debt? Relief might be just one phone call away.
This money-saving strategy is pretty straightforward: Call your credit card company and sweet-talk the customer service rep into lowering your interest rate. (Don't worry, we'll tell you how to play your cards right during your call in a moment.)
What's a few squirmy minutes on the horn worth in cold, hard cash savings? Plenty: On a $6,000 balance, at a 19% APR that you want to pay off in one year, negotiating a rate reduction to 12% will save you $198 in interest. (Monkey with this debt reduction planner calculator to see what it's worth on your own balance.)
Dealing with the new lending reality
Clearly, anyone who carries a balance on their credit card should start dialing for dollars right now. However, unlike the good ol' days of credit card debt (yes, there were some good things about unabashed competition and rate wars), this strategy isn't the slam-dunk that it used to be.
A survey several years ago found that more than half of people who asked were able to lower their interest rate by more than one-third. I don't know what the success rate is today, but anecdotal evidence suggests that as lenders have tightened their standards and reduced their exposure to consumers' indebtedness, they are more willing to lose your business to a competitor than in the past.
So what's a gal with a credit card balance to do? Give it the old college try, that's what.
Will this work for you?
Talking your credit card company into lowering the interest rate on your account has more hurdles than yesterday's dialing-for-dollars exercise to get a break on your cable TV bill.
The customers most successful at getting a break generally have these things going for them:
A stellar on-time payment history. If you've been late paying your bill (or have skipped a month or so altogether) in the past six to 12 months, your bank probably won't be as amenable to negotiations.
A relatively blemish-free credit reputation. Lenders are constantly checking your credit file to see how you're handling your other debts. So if you've been a disaster customer with another card company or have outstanding collections marring your credit file, you don't have a lot going for you when you make that call.
A long-standing relationship with your lender. Being a longtime customer can work in your favor. Being a longtime customer who regularly carries a balance (thanks for the interest payments!), uses your card frequently (thanks for the transaction fees!), or takes the bait for special offers (thanks for signing up for our overpriced credit insurance!), you are considered a "good" (aka "profitable") customer and one worthy of keeping on your lender's books.
Have a handful of competitors' offers to refer to during your call. Credit card competition has ramped up in recent years, as card companies like JPMorgan Chase (NYSE: JPM) and American Express (NYSE: AXP) now must contend with retailers such as Target (NYSE: TGT) and Home Depot (NYSE: HD) offering their own branded credit cards. (We'll show you where to find competitors' rates in a second.)
So if you have a relatively blemish-free credit record, you've been a longtime customer, and you have the patience to work your way up the phone tree (or call back multiple times until you get a bank representative who will play ball), the deck is stacked in your favor.
How much of a break should you request?
If you don't already have the details of your debt, use the "Get to Know Your Debt" worksheet (.pdf file) to track how much you owe, to whom, at what interest rate, and when it will be paid off.
Next, you want to see what your bank's competitors are offering. LowCards.com, IndexCreditCards.com, and Cardhub.com are a few places to do some research, and you'll find information both on traditional bank cards like Citigroup (NYSE: C), Capital One (NYSE: COF), and Discover Financial (NYSE: DFS) as well as retailer-specific cards.
Keep in mind that low, low rates that many issuers offer typically expire after an introductory period. If you can pay off your balance during that time frame, ask your lender to institute a low rate like that for a fixed period. If it's going to take you longer to pay off your balance, shoot for a more realistic ongoing rate reduction.
Start dialing!
Now that you're armed with information about your current debt, and you know what kinds of deals are out there, psych up to make that important phone call.
Feeling tongue-tied? Use our sample debt negotiation script to guide your conversation to its fruitful end. If you need more moral support, call in the reinforcements! Tap into the collective wisdom of the longtime Fools who frequent our active Credit Cards and Consumer Debt discussion board. Check out the helpful FAQ, too.
If it doesn't work ...
Keep trying. If you don't get what you want the first time, try to get another customer service rep or supervisor on the line. Still won't budge? Mark your calendar and call back in a few months.
More ways to save ...
Here are two other money-saving strategies you can employ:
1. Move your balances to your lowest-rate card. Simply call your lender and ask how to transfer funds. And be sure to find out what fees -- if any -- you'll be charged. (If you're maxed out on those cards, then forget it.) Weigh those against any interest savings before making the move.
2. Sign up for a new card with a low balance-transfer deal. The websites mentioned above keep a list of current balance-transfer deals. One very important thing to note before opening a new card and moving what you owe onto it: The balance-transfer strategy is rife with "gotchas" that can wipe out any savings. Read -- no, memorize -- "How to Win the Balance-Transfer Game" before you do it so you can avoid the land mines.
This money-saving strategy is pretty straightforward: Call your credit card company and sweet-talk the customer service rep into lowering your interest rate. (Don't worry, we'll tell you how to play your cards right during your call in a moment.)
What's a few squirmy minutes on the horn worth in cold, hard cash savings? Plenty: On a $6,000 balance, at a 19% APR that you want to pay off in one year, negotiating a rate reduction to 12% will save you $198 in interest. (Monkey with this debt reduction planner calculator to see what it's worth on your own balance.)
Dealing with the new lending reality
Clearly, anyone who carries a balance on their credit card should start dialing for dollars right now. However, unlike the good ol' days of credit card debt (yes, there were some good things about unabashed competition and rate wars), this strategy isn't the slam-dunk that it used to be.
A survey several years ago found that more than half of people who asked were able to lower their interest rate by more than one-third. I don't know what the success rate is today, but anecdotal evidence suggests that as lenders have tightened their standards and reduced their exposure to consumers' indebtedness, they are more willing to lose your business to a competitor than in the past.
So what's a gal with a credit card balance to do? Give it the old college try, that's what.
Will this work for you?
Talking your credit card company into lowering the interest rate on your account has more hurdles than yesterday's dialing-for-dollars exercise to get a break on your cable TV bill.
The customers most successful at getting a break generally have these things going for them:
A stellar on-time payment history. If you've been late paying your bill (or have skipped a month or so altogether) in the past six to 12 months, your bank probably won't be as amenable to negotiations.
A relatively blemish-free credit reputation. Lenders are constantly checking your credit file to see how you're handling your other debts. So if you've been a disaster customer with another card company or have outstanding collections marring your credit file, you don't have a lot going for you when you make that call.
A long-standing relationship with your lender. Being a longtime customer can work in your favor. Being a longtime customer who regularly carries a balance (thanks for the interest payments!), uses your card frequently (thanks for the transaction fees!), or takes the bait for special offers (thanks for signing up for our overpriced credit insurance!), you are considered a "good" (aka "profitable") customer and one worthy of keeping on your lender's books.
Have a handful of competitors' offers to refer to during your call. Credit card competition has ramped up in recent years, as card companies like JPMorgan Chase (NYSE: JPM) and American Express (NYSE: AXP) now must contend with retailers such as Target (NYSE: TGT) and Home Depot (NYSE: HD) offering their own branded credit cards. (We'll show you where to find competitors' rates in a second.)
So if you have a relatively blemish-free credit record, you've been a longtime customer, and you have the patience to work your way up the phone tree (or call back multiple times until you get a bank representative who will play ball), the deck is stacked in your favor.
How much of a break should you request?
If you don't already have the details of your debt, use the "Get to Know Your Debt" worksheet (.pdf file) to track how much you owe, to whom, at what interest rate, and when it will be paid off.
Next, you want to see what your bank's competitors are offering. LowCards.com, IndexCreditCards.com, and Cardhub.com are a few places to do some research, and you'll find information both on traditional bank cards like Citigroup (NYSE: C), Capital One (NYSE: COF), and Discover Financial (NYSE: DFS) as well as retailer-specific cards.
Keep in mind that low, low rates that many issuers offer typically expire after an introductory period. If you can pay off your balance during that time frame, ask your lender to institute a low rate like that for a fixed period. If it's going to take you longer to pay off your balance, shoot for a more realistic ongoing rate reduction.
Start dialing!
Now that you're armed with information about your current debt, and you know what kinds of deals are out there, psych up to make that important phone call.
Feeling tongue-tied? Use our sample debt negotiation script to guide your conversation to its fruitful end. If you need more moral support, call in the reinforcements! Tap into the collective wisdom of the longtime Fools who frequent our active Credit Cards and Consumer Debt discussion board. Check out the helpful FAQ, too.
If it doesn't work ...
Keep trying. If you don't get what you want the first time, try to get another customer service rep or supervisor on the line. Still won't budge? Mark your calendar and call back in a few months.
More ways to save ...
Here are two other money-saving strategies you can employ:
1. Move your balances to your lowest-rate card. Simply call your lender and ask how to transfer funds. And be sure to find out what fees -- if any -- you'll be charged. (If you're maxed out on those cards, then forget it.) Weigh those against any interest savings before making the move.
2. Sign up for a new card with a low balance-transfer deal. The websites mentioned above keep a list of current balance-transfer deals. One very important thing to note before opening a new card and moving what you owe onto it: The balance-transfer strategy is rife with "gotchas" that can wipe out any savings. Read -- no, memorize -- "How to Win the Balance-Transfer Game" before you do it so you can avoid the land mines.
Subscribe to:
Posts (Atom)