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Are auto insurance rates determined by credit score instead of driving record?
April 16, 2016
Auto insurance rates are determined by BOTH Credit Score AND Driving Record in addition to other important factors. An "Insurance Score" [1](similar to credit score) is the what the insurance industry uses in the rating of home and auto insurance. In states where insurance scores are allowed, it is a significant factor in the determining what you pay for auto Continue Reading
Auto insurance rates are determined by BOTH Credit Score AND Driving Record in addition to other important factors.
An "Insurance Score" [1](similar to credit score) is the what the insurance industry uses in the rating of home and auto insurance. In states where insurance scores are allowed, it is a significant factor in the determining what you pay for auto insurance.
Most companies use a complex formula that combines a person's Insurance Score along with their driving record and other factors to determine your final rate. Your insurance score is a large factor in determining your base rate. [2]
Is having good credit better than having a good driving record?
Each company has unique rating schemes that will weigh factors differently.
However, it is my experience that having great credit (or insurance score) with a fair driving record is better than have a fair insurance score and a great driving record. So, on balance, a great insurance score is better than a great driving record.
In order to get the best insurance rates possible, strive to improve both your insurance score and driving record. The following link provides more information on strategies to reduce your car insurance premiums.
Best of luck with improving your insurance score, driving record and lowering your car insurance rates!
Footnotes
[1] Credit-Based Insurance Scores
[2] investopedia.comHow An Insurance Company Determines Your Premiums | Investopedia
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“Am I covered if I drive someone else’s car?” Or, “Am I covered if someone else drives mine?”
Many don’t realize that the insurance industry is one of the country's most regulated business segments, especially in New York State. The New York State Department of Financial Services (NYS DFS) wields significant control over the insurance business and has a stated goal of protecting consumers.
Most property insurance companies offer Actual Cash Value or Replacement Cost settlement options. Typically, insurance companies will require that you insure the property to the settlement value you choose. If you select Actual Cash Value, the amount you may be required to insure the property for will be less than the corresponding Replacement Value.
In that spirit, the Ryan Agency is sponsoring a Stearns BBQ Dinner pickup at our office on 57 Broadway Mall in Hornell on September 12th from 3:00 PM to 4:30 PM.
Today, an individual’s credit history can play a more significant role than any one of those traditional factors. Good Credit Scores lead to a Positive Insurance score. A good Insurance Score greatly influences what someone will pay to insure their vehicles.
Insurance companies offer various discounts for which their policyholders may qualify.
Great Eight number Six (6) suggests taking a look at removing Comprehensive and Collision on Older Vehicles.
By reducing the number of claims in your insurance history, you can significantly affect your rates in the future.
Sometimes, this concept meets with resistance from policyholders. The thought of paying more in the event of a claim is off-putting to some. Even if that means I pay more for my insurance.
OK. Admittedly, this strategy doesn't benefit everyone, but it can be very beneficial for those it does. You may have unique home or auto insurance needs that prevent you from bundling with the same company. Alternatively… you might have a better rate without the bundle discount by splitting up your insurance between multiple carriers.
