Credit Rating impacts on Car Insurance Rates

Bird mama · ‎03-12-2010

This probably has been going on for some time now, but I just noticed in one of the stuffers from my auto insurance company that they solicited credit report information from an agency.

Help me understand what the heck my credit rating has to do with my overall car insurance. I understand that the insurance company wants to be paid on time (and they are). I understand that the insurance company wants to know if I am a menace to society and have any tickets/points on my driving record.

I'm in health insurance which is different from auto - why do you think my credit rating has anything to do with determining risk for auto insurance?.

There are many elements: wind, fire, water
But none quite like the element of surprise

MyGirlsMom · ‎03-09-2010

It impacts your Home Owners Insurance as well.

Keep Your Face To The Sunshine and You Will Not See The Shadow

Moonchilde · ‎05-23-2010

A measure of general reliability in all things. They (some companies) also check the credit reports of job applicants. It's (theoretically, for them) a meadure of whether you are "likely" to be a careful driver, or not. That's the rationale. It has a point in a general (VERY general) way.

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Mominohio · ‎08-08-2010

In a nutshell, they do it because they can. No one has outlawed it, and they can make more money off of someone, although usually those with bad credit don't have much money. Most states require car insurance, and they are looking for ways to make more money. And there might be some numbers that support those with bad credit file more claims, but that is just a guess on my part.

My mom has a philosophy that insurance companies are just the mafia without the guns. I tend to agree. They are making billions and billions of dollars off the backs of people who have to have their products.

Bird mama · ‎03-12-2010

I have an excellent credit rating and my no fault on my old car dropped

$40 from the last 6 month period to the upcoming period. That said, even though my credit rating benefitted this experience, I still think it's stupid.

@Mominohio

Your Ma and I need to have a cup of coffee - I agree with her.

There are many elements: wind, fire, water
But none quite like the element of surprise

Lucky Charm · ‎03-09-2010

They have been doing this for at least 20 years now.

Carolm · ‎09-05-2013

There is an article on this subject in this month's Consumer Report magazine. It was in depth and an eye opener, for anyone looking for more information.

millieshops · ‎03-09-2010

Maybe people with high credit ratings have more to lose than those with low ratings, so they drive more carefully, park their cars in safer neighborhoods, etc.????

I know our credit ratings are used for many reasons -- here and there some of those reasons make sense, but those who use them should have to show the correlation ---assuming one exists.

Mominohio · ‎08-08-2010

@Bird mama wrote:
I have an excellent credit rating and my no fault on my old car dropped
$40 from the last 6 month period to the upcoming period. That said, even though my credit rating benefitted this experience, I still think it's stupid.

@Mominohio
Your Ma and I need to have a cup of coffee - I agree with her.

@Bird mama I'm sure she'd enjoy that!