Good scores always come with their own bag of perks. Credit scores also work the same way. They are an important non-driving factor in determining your car insurance rates. Many car insurance companies use a credit-based auto insurance score to decide whether or not to accept you as a policyholder and, if they do, what rate you'll pay. While credit is only one of several factors that affect your rate, it can help you save money.
Best Car Insurance Companies for Drivers with Good Credit
Credit scores have an equal impact on your insurance rates as the other driving and non-driving factors that govern it. Companies use your credit score to evaluate whether or not to accept you as a policyholder and what premium you'll pay if they do.
What one can look for is customizable policies, customer service, and affordable rates. Based on the average annual premium rates, here is a list of the best insurance companies that provide the best rates for drivers with good credit.
Credit scores are one of the non-driving factors that determine insurance rates. Research has indicated that credit-based insurance scores can predict the likelihood of an accident. Also, those with a good credit score are less likely to file a claim. An independent study by the Federal Trade Commission revealed that credit-based scores are effective risk predictors.
Hence, companies count on credit scores to determine the respective policy rates.
Which providers do not consider your credit for your insurance rate?
Though most companies use credit scores to determine the risk as an insurance payer, there are companies that do not consider the same for your auto insurance rates. Similarly, states like Michigan, California, Hawaii, Massachusetts, and Washington (temporarily) do not use credit scores to determine insurance rates.
Dillo Insurance: Based in Texas, Dillo Insurance is operational in all areas of Texas and places like Dallas, Houston, and Austin. Dillo doesn't consider credit scores or accident history to calculate the insurance rates.
CURE Insurance: This is operational in the states of New Jersey and Pennsylvania. They calculate the insurance rates based on driving history.
Equity Insurance: Founded in 1965, Equity Insurance is based in Oklahoma and offers non-standard auto insurance without credit checks.
There are companies that offer usage-based and telematics insurance, not taking credit scores to determine insurance premiums. Roots Insurance, MetroMile, SmartMiles from Nationwide, and Milewise from Allstate, provide usage-based insurance. The telematics-based insurance schemes are Progressive Snapshot, Lemonade Car Insurance, Farmers Signal, and State Farm Drive and Safe.
How does credit affect your car insurance?
An excellent credit score will make your policy cheaper and more affordable. Those with a poor credit score pay an average of $1600 more than those with a good credit score.
Also known as the FICO score, a credit score is drawn from the data contained in your credit report. This information is used by insurance companies and lenders to determine your likelihood of timely loan repayment, impacting your interest rates.
The difference in the average annual premium rates for full coverage for the various credit tabs is given below.
What are the car insurance rates according to credit scores by state?
How to save on car insurance if you have a good credit score?
Though you might be paying less, there are hacks to save on your car insurance.
Maintain your credit score: Paying your bills on time, reducing debt, and checking the credit report for errors can boost your credit score.
Calculate and file your claims: It is not always necessary to file claims, in case of accidents. If it increases the premium rates or if your repair costs are affordable, then it is better not to file a claim, s lesser the claim history, the lower will be the premium rates.
Choose your coverage wisely: Always keep a tab on the value of your vehicle, as it will decrease with time. If the value of the chosen premium is more than the value of your vehicle, then reconsider your plan.
Compare rates: It is wise to compare the quotes from different companies and zero on the one that best suits your needs and limitations.
Look for discounts: Most insurance companies offer discounts for loyalty, bundling insurance, driving history, good academic record, multiple cars, and low-mileage use.
What are the factors other than credit score that affect your car insurance?
Regardless of your credit score, the insurance companies can take into consideration a number of factors that determines your eligibility and premium.
Driving Record: Drivers with accidents at fault, DUI, or tickets on their record are likely to pay more rates. A clean driving record will result in lower premiums.
Location: The regulations, as well as the premium, vary with the state. While most states allow the use of credit scores to calculate the premium rates, states like Michigan, California, Hawaii, Massachusetts, and Washington (temporarily) do not use credit scores to determine insurance rates.
Age and Gender: Age and gender can categorize you under the high-risk category of drivers. If you are a male and fall between 16 and 24 years of age, then you are at higher risk for accidents, hence higher premium rates compared to a female falling under the same age group.
Type of Car: The insurance rates can vary with the type of car you own. Those with advanced safety features are eligible for lower premium rates. They will also examine previous claims for comparable models and estimate repair costs, theft rates, and total compensation.
Coverage Options: The insurance coverage one opts for can determine the premium rates. Higher limits and additional coverage may lead to higher premiums,but it will ensure that you are covered. Many companies offer discounts based on the coverage options, or while bundling insurance. Keeping a higher deductible will reduce lesser premium rates.
Auto Insurance Data Methodology
The auto insurance rates published in this guide are based on the results of research completed by Way.com’s data team. Using a mix of public and internal data, we analyzed millions of rate averages across U.S. ZIP codes.
Quotes are typically based on a full coverage policy average unless otherwise noted within the content.
These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes will differ. Given this, it’s important to go through our insurance steps form to find how much you can save with way.com
Frequently Asked Questions
Does your credit score affect your auto insurance rate?
Credit scores are one of the major non-driving factors that determine the premium rates. While a good credit score can reduce your premium rates, a poor credit score can categorize you as a high-risk driver, increasing your premium rates.
What credit score is good?
A credit score that lies between 670-850 (good-excellent) is considered to have an effect on decreasing your car insurance rates.
Does getting an insurance quote hurt credit?
No, it has no impact on your credit score. Auto insurers check your credit using a soft pull, which does not reveal your complete credit history and has no effect on your credit score.
What factors can affect your credit score?
A high amount of debt, due payments, short credit history, accounts in collection, and high number of credit inquiries can decrease your credit score.