Can my Credit Score REALLY affect my Insurance Cost?
You already know that there are numerous variables that can influence your insurance costs. They include the type of coverage you need, your age, etc. Both your homeowner’s insurance and your vehicle insurance can go up if you have a low credit score. This doesn’t seem fair, and many believe it is just one more way for insurance companies to take advantage. They know that coverage is mandatory in many instances so consumers have no choice but to pay.
What is the Cost?
You shouldn’t brush it off lightly that you will pay more for insurance costs if you have a poor credit score. This price increase can range from 20% to 50% for the same coverage. That is money you are just throwing away month after month. Just because you have a low credit score, it doesn’t mean you are more likely to cause a traffic accident. It also doesn’t mean that you are more likely to file a claim with your homeowner’s insurance.
Not all insurance companies make it a practice of looking at your credit to determine what they will charge you. Instead, they look at the value of your home or your driving record. They also look at the types of vehicles you wish to insure with them. Make sure you have the mandatory coverage in place as well as any options you want. Many websites allow you to do a side by side comparison of insurance rates.
Avoid getting coverage through any agency that penalizes you for your credit score. By doing so, you can hit them where it hurts – their profits. There are enough insurance agencies out there that you don’t have to feel backed into a corner.
Voice your Opinion
If the idea of paying more for insurance based on your credit score makes you angry, you aren’t alone. Many consumers are voicing their opinion about this. They are talking to their local representatives as well as legislators. They are also voicing their opinions with state insurance regulatory agencies. Speak up for your rights as this issue is one that is going to remain debated for a long time before a decision is made.
To answer the question does credit affect insurance cost, the answer is yes. Many insurance companies believe that if you have poor credit, it can reflect on your overall level of responsibility. Yet they fail to take into consideration that there are many underlying reasons that can cause a poor credit score.