Credit scoring debate continues
In regard to Bart Anderson's March article, "Credit scoring: Tough to explain, hard to beat," if credit scores are such an accurate predictor of risk, why do most companies just use the rating of the first named insured? It seems that all insureds' scores should be used to evaluate the exposure to loss. Or perhaps credit scoring is just another tool to permit insurance companies to price as they desire.
Mike Scott, CPCU, CIC
Cincinnati, Ohio
Overture parallels life
Chris Amrhein wrote a great article on Tchaikovsky and risk management ("Want fireworks? Make like Tchaikovsky," AA&B July 2010). My father was (and still is) an audiophile who had so many LPs (and now CDs) with the 1812 Overture performed by various symphonies. The one thing that always held true was that the volume was cranked up all the way and the house literally shook when the cannons went off. Every gent whom I dated was subject to at least one audience with my dad, his sound system and that piece of music. A fond memory, indeed.
My dad is not an insurance guy, but he's a smart guy, so I e-mailed him a copy of the article. I know he'll understand the parallels that you drew, and more than that, I am sure he will appreciate them. Thanks again.
Wendy Gable, JD, CPCU
Folsom, Calif.
A different view
In response to Richard Mintzer's July article, "The permissive-use paradox," I have done a review of two personal auto policies. The results are listed below.
1. Covered person: You or any family member, any person using your covered vehicle, no actual words "permissive" found in policy. There is no time limit found in the policies. 2. Omnibus clause-permissive use. Only the named insured gives the permission and any limitations of time, place or purpose. The facts indicate the time was indefinite.
o Smith is not an insured but a covered person for use only and no time limit.
o Smith has no insurable interest, only coverage for use by permission. For the purpose of property, insurable interest is determined at the time of the loss. For life insurance it is at the time of purchase.
o No time limit in policy.
o Presume that the insurance company renewed the policy with no questions asked. Any new drivers in the household? Nothing in the policy seems to indicate there is any obligation to add drivers with permission to use.
o A question for the lawyer, and not an insurance professional. The bank would be covered for a loss by the insurance policy loss payable clause.
David G. Hendricks, CIC
Tucson, Ariz.
