Getting affordable auto insurance with poor credit requires a bit more work. Today, large numbers of carriers look at financial position of the applicants to determine the likelihood of them making claims and it is allowed in most states. Some companies can offer up to 25% lower rates to policyholders with good credit score. In the opposite direction, you would at least be losing such discounts with them. On the other hand, some auto insurers couldn’t care less if you are having money problems lately and what is your FICO score. But there may be a catch you should know.
Underwriters continuously look for ways to measure the risks of claims. Their views have been shifting from looking at past driving experience to financial position of applicants. The theory is that people with money problems may have no choice but to make a claim while better off policyholders may ignore small scratches or pay for them out of pocket. In that sense, looking into one’s current financial affairs through credit reports provide valuable information.
Auto Insurance Quotes with Bad Credit
You have two options when you are in bad shape financially and that results in poor score.
First one is to look for no credit check auto insurance companies to get quotes. There are several non-standard insurers who offer quotes without looking into your credit information. The problem is that these carriers don’t need to look deep into your details to charge you expensive rates because they are already in the expensive end of the market. So, getting quotations from them may not be as advantageous as it appears.
Also, credit based insurance scoring isn’t allowed in California, Hawaii and Massachusetts and therefore carriers cannot look into your financial activities and categorize you while giving quotes.
Secondly, you may start shopping around in the usual way and see what comes up. Remember that credit history is only one of the factors that affect your premium. There are many other discounts to qualify for that you can still find reasonably priced policies even with bad insurance score.
Finding a competitive automobile insurer can save you as much as 4 – 5 times in comparison to being with a carrier whose typical rates are much higher than anyone else. So, desperately looking for car insurance companies who don’t check credit may be an extreme approach and you should give others a chance too if you want to find the lowest rates for your circumstances.
The problem is that most insurers don’t share their rate tables. Therefore, it is usually unclear which company charges less or more for a particular detail. Even if a provider claims to be specialist in bad credit car insurance market that doesn’t mean that others aren’t going to offer quotes that will beat theirs. The best thing to do is to get your quotes in to see where you stand.
Understandably, no credit check vehicle insurance would be great when you know you have a problem in that department. Another approach may be that you figure out your strong points and see if they can land you savings to offset your shortcomings. For example, you may have a great driving history that can qualify you for as much as 30% discounts. And you may be a homeowner and some companies offer around 10% discounts for such people even they appear to be struggling financially looking at FICO score.
Also, there is a distinction between companies who wouldn’t check your credit while giving quotes and companies who wouldn’t include this detail in their premium calculations. A few companies don’t check your credit while they offer car insurance quotes. It doesn’t mean they don’t need to know. They simply ask you if your score is good, average or poor. Once you decide to go on cover they can carry out their usual checks on you and adjust the premium if there are discrepancies in the information you provided. In the case of latter providers, they just don’t include such detail in their calculations.