Examining How Your Credit Can Affect Your Insurance Coverage

ByDarren Kutcher

In the past decade, more insurance companies have started using your credit history to help determine the risk you pose. While you might wonder how credit scores can possibly have anything to do with your driving skills, you might be surprised to know that it does tell companies a lot about you.

Your insurance company uses several factors to determine how much your premiums will be. Most drivers know their driving record is used. You may know already that where you live plays a part in the determination of your premiums. However, the reason a credit score is in the mix is due to it showing how responsible you are.

The responsibilities credit history tells about you is whether or not you would be likely to file claims. Your credit score is also used to decide whether you will pay your premiums on time. Most companies also use an insurance history report to see if you have filed several claims in the past. The more claims you may have made, the higher risk you pose to a new company.

You may be denied coverage from some companies due to your current credit score. If you are denied, you can request a copy of an up to date credit report for learning the reasons you were denied. You are entitled to one free report every year. Sometimes the smallest issue in your report can cause you big troubles.

Saving money these days is necessary more than ever. By working to improve your current score, you can qualify for greater coverage for smaller premiums. Some companies do offer better rates than others. However, you can not know the real difference until your credit is no longer an issue.

Talking to a financial professional about the ways to improve your score can help. The trained professional can help you to the parts of your report that need to be concentrated on the most. You might talk to your bank or other financial institution about all the steps you can take for credit repair. Drivers are required by law to carry insurance, so working to get it as cheap as possible is certainly worth your time.

You have several options for getting your premiums lowered. Taking care to keep good credit in one of those ways. Maintain a clean driving record and always make your premium payments on time for making sure you are getting the lowest rates. Your agent can help you to make the right decisions about changes and improvements.

Motor vehicle owners, you will get details about Maryland auto insurance requirements and cheap ins tips on our site, right now.

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Insurance: Car-Auto
Darren Kutcher

Email Address:SubscribeCar Auto Article FeedFind More ArticlesSearchRecent Articles17 Year Old Driver InsuranceEssential Things To Note Whenever You Make A Motor Insurance Coverage ClaimWhy Modern Automobile Makers Are Rediscovering ColorImportant Information About Car Accidents And Your Insurance CoverageShopping for a New Car? Consider the Insurance Cost Before BuyingHow to Change to a New Car Insurance CompanyCompetitive Performance and Modified Car InsuranceAuto Accidents - What to Do If You Hit a DeerEight Simple Ways to Reduce the Cost of Car Insurance for Young DriversTips For Making Best Choices For Insurance RenewalSubmitted On March 16, 2012. Viewed 2 times. Word count: 418.

MLA Style Citation:
Kutcher, Darren".".16 Mar. 2012EzineArticles.com.17 Mar. 2012 .APA Style Citation:
Kutcher, D. (2012, March 16). . Retrieved March 17, 2012, from http://ezinearticles.com/?Examining-­How-­Your-­Credit-­Can-­Affect-­Your-­Insurance-­Coverage&id=6944692Chicago Style Citation:
Kutcher, Darren "." EzineArticles.com. http://ezinearticles.com/?Examining-­How-­Your-­Credit-­Can-­Affect-­Your-­Insurance-­Coverage&id=6944692EzineArticles.com© 2012 EzineArticles.com
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Does Credit Affect Insurance Rates?

ByMarilyn Katz

Poor credit And Car Insurance

It may not seem fair at all, but auto insurance companies are allowed to increase rates for their customers with credit problems. You could be a great driver, and you could drive a very safe car, but you might never qualify for the cheapest rates if you have poor credit.

Insurers have won the right to consider credit when they look at risk factors. They have demonstrated that people with worse credit tend to make more claims. Higher risk drivers get charged more. If insurers can use low credit scores as a risk factor, they can hand you a higher rate.

Poor credit can happen to great people. Some people have unexpected illnesses or layoffs, and they get behind on their bills. Obviously, when credit suffers, paying bills can be a challenge. That is why it probably seems unfair to get rate increases from car insurance companies at the worst possible time.

Home Policy Rates Can Be Affected Too!

Low credit scores can affect your auto insurance rates. In fact, it can also affect your homeowners insurance rates. Just when you have financial problems, it may seem pretty cruel to get dinged twice with more expensive car and home policy premiums!

Drivers With Bad Credit May Need To Shop Around

If your auto insurance rates have gone up because your credit score has declined, you may need to shop around. A lot of the top insurers do use credit as a risk factor, but not all of them weigh it the same. You need an insurer who will also consider your good driving history and other factors.

Just because you have had credit problems does not mean you will not be entitled to other discounts. Looking for deals should be a priority. When you have credit problems, you probably want to reduce all of your expenses so you can get yourself out of trouble.

If you also own a house, or even if you rent, you may be able to bundle your auto and home policies, with the same company, in order to get a discount. These multiple policy discounts are one of the most common ways to save money on premiums.

The auto insurance business is very competitive today. Because of this, your car insurance rates are also give you an opportunity to save money. If you do not like getting your premiums raised because of your credit problems, you have the right to shop around!

Do you need bad credit insurance? Visit us for more information about fighting premium increases. We would also like to help you fix bad credit as quickly as you can!

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Insurance: Car-Auto
Marilyn Katz

Email Address:SubscribeCar Auto Article FeedFind More ArticlesSearchSimilar ArticlesHow to Ensure That You Get Favorable Auto Insurance RatesMoney Problems Created by Credit #4 - Auto Loans and ConcernsA Few of Our Favorite Things (That Can Lower Homeowners Insurance Rates)How to Get Bad Credit Auto LoansPoor Credit And Auto Insurance - A Single Effective Method To Saving MoneyTexas Ranks Above Average on National Credit ScoresGetting the Best Cheap Auto Insurance - Car Insurance TipsHome Buyers: Improve Your Credit ScoreFix Credit Rating Hassles With These Simple Tips!Games the Auto Dealer Wants to PlayRecent ArticlesWhat You Need To Do To Obtain Cheap Car InsuranceReasons Why Men Are Better Drivers Than WomenHow Little Lies Can Cost You DearlyChoosing A Car Insurance Company To Insure Your Car WithFacts On Cheap Young Driver Car InsuranceThe Benefits Of Online Comparison Shopping For Your InsuranceInformation About Connecticut Car InsuranceSave Money by Comparing Cheap Car Insurance Quotes OnlineWhen Was Car Insurance Invented and Why?Having Your Car Protected In Spite Of Terrible Claim HistorySubmitted On March 13, 2012. Viewed 2 times. Word count: 412.

MLA Style Citation:
Katz, Marilyn".".13 Mar. 2012EzineArticles.com.14 Mar. 2012 .APA Style Citation:
Katz, M. (2012, March 13). . Retrieved March 14, 2012, from http://ezinearticles.com/?Does-­Credit-­Affect-­Insurance-­Rates?&id=6937243Chicago Style Citation:
Katz, Marilyn "." EzineArticles.com. http://ezinearticles.com/?Does-­Credit-­Affect-­Insurance-­Rates?&id=6937243EzineArticles.com© 2012 EzineArticles.com
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Why Auto Insurance Companies Use Credit to Rate

There has been an ongoing debate on whether a person’s credit score is a good indicator of the risk associated with insuring them. Many feel the use a motorist’s financial history is not a fair practice and has nothing to do with the consumer’s ability to drive and his or her likelihood of filing a claim. But if a person disagrees with an auto insurance company’s decision to use this information to help determine rates, he or she should be aware that there is evidence to support the correlation between a person’s credit and the chance of them claiming a loss.

Consumers should understand that carriers are in the business to turn a profit, and in order to do so companies must assess risk and protect against losses. While not many consumers are sympathetic towards insurers, they must realize that the less claims that carriers pay out, the cheaper the rates that can be offered. Companies that suffer significant losses often have to increase premiums to offset the payouts given to claimants. That is why if a consumer obtains and compares car insurance quotes online or by any other means, it is highly likely that there will be a substantial difference in premiums between insurers.

Get the Most Affordable Car Insurance Regardless of Credit

Although many do not agree with the use of finances to rate drivers, maybe unless they have great credit, insurers put a lot of time and effort into conducting studies to predict risks. Studies have shown that not only do motorists with poor credit scores be more likely to file claims but that the severity of accidents and payments for losses are higher. But just like all auto insurance policies, where one person is receiving a discount, another is being surcharged. And while those with good credit histories may pay lower rates, others may have to make up the difference.

Fortunately, there is a way to get the most affordable premiums available regardless of how credit based insurance scores may affect drivers. Whether a person has a sports car, bad driving record or poor credit, the most effective way to ensure that the best deal is found it to shop around. There are many companies out there and each have different experiences with policyholders. Although there may be a company charging a higher rate for coverage, which could be because previous insureds with bad credit filed claims, another carrier may have had a better experience with similar individuals and can offer cheaper rates. The best way to find out is to get as many quotes as possible.

Source: http://www.onlineautoinsurance.com/

 

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