since when does your credit rating determine your car insurance premium?

[rainbowmoon]

I just got a letter form my insurance company saying that they are getting mine (and my dead husbands credit report) to determine our ins. premium (his name is still on the insurance as the car loan is in his name only) we have used this company for years (American Family). the letter said any previous losses will be reviewed as well (Well DH died in my vehicle and I got the accidental death payoff as well as roughly $6,000 in repairs). also there are some debts in his name only that have been recently written off. I feel like this is really unfair. are there any car ins. companies that don't do this and why all of the sudden are they checking credit reports? I am going to call my agent today but was wondering what you mamas thought? my credit is fair, but not great. what can I do?

[JesseMomme]

The best I can say is to call around at different companies.

I too have found that for just my Dh to have car insurance (not even with me on it, I don't drive) they check credit histories (ours is bad) and it jacks their rates up. It's not fair b/c Dh has driven for over 10 years with no accidents, no points on his license, he's over 25 (car ins. co's factor in age and gender too) but our creidt history just seems to keep making CI even more expensive for us than it was 8 years ago.

[Benji'sMom]

I think they all do it. There was a class action suit against Allstate a few years ago for messing up and reading people's credit reports wrong, and therefore making their premiums higher than they should have been. But the problem wasn't that the credit reports were used at all, it's that they were misread.

[Sharlla]

As far as I know none of the major car ins co.s have done this to us

safeco
state farm
esurance
geico

[1growingsprout]

Yes auto insurance co's use credit reports to analyze risk. your credit score is used for many different things, not just 'standard credit'
it may just be a 'soft' hit on the cbr and wont be a full inquiry, depending on what they are looking at. so sorry you are going thru this

[CerridwenLorelei]

they have been doing it for the last

five years...

The explanation is if you are a high credit risk then you are a bad driver as well

Whether that is the case or not

[jorismom]

It's all based on underwriting statistics and risk factors. Statistically, people with worse credit scores are in more accidents, so it is one more factor that goes into the mix. Same reason age, gender, location, etc all go into it. It's not "fair" necessarily, but it's the nature of underwriting. I believe most companies do this, and the once that didn't are starting to.

[pinksprklybarefoot]

After I declared bk, my car insurance went up significantly. I pay as almost as much for liability only as my bf does for full coverage. And I am a MUCH safer driver than he is. My car insurance was so ridiculous that last when my battery died a few weeks ago, we decided to just become a one car family.

[AprilDaisy]

Farm Bureau (here in Louisiana) has always checked for credit rating...as well as being a company that you had to have a relative already in there in order to be considered for insurance....much less approved. This is fabulous insurance though! We no longer have them....

Even my local telephone company based my deposit on my credit rating.

It happens.

[Daisie125]

I can tell you for sure State Farm does not do it. I asked when I got my policy (because I have HORRIBLE credit) and he said no. Plus my premiums are VERY low, and if they were taking that into account, they would be much higher for sure.

I would switch companies... not all of them do it.

[Denvergirlie]

Originally Posted by Daisie125

I can tell you for sure State Farm does not do it. I asked when I got my policy (because I have HORRIBLE credit) and he said no. Plus my premiums are VERY low, and if they were taking that into account, they would be much higher for sure.

I would switch companies... not all of them do it.

I have State farm and my credit was checked. It might be state to state or something?

[CerridwenLorelei]

in tx state farm does

it...

[Nicole77]

We had this issue when we bought our house too. The insurance on our 1500 square foot house was more money per year than my parent's house with 4500 square feet, a pool, a hot tub, and a barn/riding rink all because our credit was fair, not good or better. Apparently, they got the clearance to start doing this a few years back. So, in their minds since our credit is not great we are more likely to make a claim. : Quite frankly, the whole thing pisses me off. Yet another way the government is allowing big business to rip off lower and middle income families.

[JesseMomme]

Originally Posted by Nicole77

We had this issue when we bought our house too. The insurance on our 1500 square foot house was more money per year than my parent's house with 4500 square feet, a pool, a hot tub, and a barn/riding rink all because our credit was fair, not good or better. Apparently, they got the clearance to start doing this a few years back. So, in their minds since our credit is not great we are more likely to make a claim. : Quite frankly, the whole thing pisses me off. Yet another way the government is allowing big business to rip off lower and middle income families.

:

[lisalulu]

Originally Posted by Daisie125

I can tell you for sure State Farm does not do it. I asked when I got my policy (because I have HORRIBLE credit) and he said no. Plus my premiums are VERY low, and if they were taking that into account, they would be much higher for sure.

I would switch companies... not all of them do it.

When I signed up with State Farm in 93, they didn't. But when we ordered a copy of dh's credit report a couple years ago, they were listed as one of the companies that had looked at it. I'm not sure if this has to do with our insurance coverage or the credit card offers they send us? It never affected our rate at all.