Credit Scores May be Factored Into Car Insurance Rates, Reports Edmunds.com
SANTA MONICA, Calif. — July 11, 2011 — Ignoring outstanding bills could raise your car insurance premiums, while paying them off may help you secure a lower rate, reports Edmunds.com, the premier online resource for automotive information.
In its report on the personal factors that affect car insurance rates, Edmunds.com found that some companies consider a driver's credit score as a factor in setting premiums. Studies show that the way a person manages his or her financial affairs is an accurate predictor of the number and size of insurance claims he or she might file, according to the Insurance Information Institute.
"Many people know that their driving profiles and personal information — like age and occupation — are factored into insurance rates, but they'd be surprised to know that some insurance companies will dive this deep into their financial affairs," said Edmunds.com Features Editor Carroll Lachnit. "It's been the subject of some controversy, and it's been challenged by many state legislatures, with seven states passing laws last year restricting the practice."
For drivers in states where credit checks are allowed, keeping a clean credit is just one way that they can minimize their insurance premiums. Other ways to get lower rates on car insurance include:
- Consider pay-as-you drive insurance. If you're willing to give up some privacy, insurance companies can set lower rates based on telematics that monitor your driving behavior. Edmunds.com has more information on this practice at http://www.edmunds.com/auto-insurance/pay-as-you-drive-insurance-goes-into-high-gear.html
- Change your coverage. If you're willing to pay a higher deductible, you can save big on your premium rates.
- Explore discounts. Insurance companies offer discounts based on a variety of factors, from low-mileage driving, to using anti-theft and tracking devices.
More details on the personal factors that affect insurance rates — as well as a link to a list of states enacting regulations on credit checks by insurance companies — can be found on Edmunds.com at http://www.edmunds.com/auto-insurance/personal-factors-that-affect-insurance-rates.html.
Securing an honest rate on car insurance is just half the battle. Edmunds.com also gives consumers advice on how to get the most out of their insurance claims at http://www.edmunds.com/auto-insurance/confessions-of-an-auto-claims-adjuster.html.
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Edmunds publishes Web sites that empower, engage and educate automotive consumers, enthusiasts and insiders. Edmunds.com, the premier online resource for automotive information, launched in 1995 as the first automotive information Web site and hosts the most established automotive community online. Its mobile site, accessible from any smartphone at www.edmunds.com, makes car pricing and other research tools available for car shoppers at dealerships and otherwise on the go. InsideLine.com is the most-read automotive enthusiast Web site. Its mobile site, accessible from any smartphone at www.insideline.com, features the wireless Web's highest quality car photos and videos. AutoObserver.com provides insightful automotive industry commentary and analysis. Edmunds is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit. Follow Edmunds.com on Twitter@edmunds and fan Edmunds.com on Facebook at http://www.facebook.com/edmunds.
