Do wealthy people pay less for insurance than poor people?
Posted by: info | December 27, 2006
In general people with good credit have more money than people with bad credit. However, I do know that there are certain exceptions to this general opinion of mine. Some people with low incomes have excellent credit and some wealthy people have bad credit. How does this impact auto insurance rates?
If you make minimum wage with little or no benefits and have to go to the hospital you may have trouble paying off the bill. You may also have to pay bills with priorities like electric, water or gas before you can pay your credit cards, telephone or debt related bills and this hurts your credit rating. I don’t think you should ever purchase something you can’t afford but almost everyone needs a telephone or cell phone these days. And you may also need a credit card for emergency situations in which all these bills would be hard for anyone to pay off on minimum wage.
An employee who makes $6 an hour will make $240 a week before any taxes or benefits are taken out. So if you figure 20% is taken out of each check for all the taxes, benefits and uniforms you would end up bringing home $192 a week. It is hard to pay rent alone on this income much less electric, water, gas, food and the rest to the other bills a normal tenant has. What does all this mean? This is just an example of how easy it is to get bad credit when you are on a low income budget.
Lets look at how a wealthy person could pay less for auto insurance than a poor person. This is just an example and please keep in mind there are many other things that factor your auto insurance premiums than credit alone. If insurance companies base rates based on credit scores a person with good credit who has an accident or ticket on his driving record could possibly pay less for auto insurance than a person with bad credit and a perfect driving record. Is this right? I hope in the future we can get all insurance companies to look at driving records and filed claims instead of credit alone. I have read that companies think someone with bad credit is more likely to file a claim than people with good credit. In my opinion just because someone has bad credit doesn’t mean their a bad person or will commit fraud they may have just had a set back or was put in a situation in which they had no choice but to allow an item to go on their credit report.
Posted in: Insurance, General |
One Response to “Do wealthy people pay less for insurance than poor people?”
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July 12th, 2007 at
Wealthy people do and should pay less for insurance. We get ripped off on taxes. It is only fair that we pay a lot less for big purchase items.