Does credit rating influence car insurnace?

[swbsam]

I'm very thankful but a bit curious. Due to being labeled "high risk" back in October, our car insurance for me an my wife was around $400 a month, and only a super shady local insurance company gave us that good of a rate (geico wanted $700 a month!).

My wife and I have been paying down our debt like crazy recently and our credit scores have increased dramatically - on a whim I reapplied to Geico and our new rate was $209. We signed up yesterday and, while I'm happy, I was under the impression that they didn't take your credit score into consideration. In fact, they didn't even ask for my social.... Hmm..

 

[Gibson486]

depends on state

 

[Saga]

As stated, it does depend on state. But your credit score nowadays seems to basically be the single best way to evaluate an individual as a risk for.. just about anything.

Give us another 4-8 years of Obama and we all might have our FICO tattooed on our shaved skulls.

 

[krylon]

Did you turn 25?

 

[KB]

Did you just reach age 25 or just get married? A similar thing happened when I turned 25 and being married lowers your insurance quite a bit.

 

[DisgruntledVirus]

Originally posted by: Gibson486
depends on state

I believe it's currently every state except CA that we look at credit rating to rate a policy.

We don't get your actual credit report/score though, we simply get a vendor that reviews the credit rating and puts it through the application that gives you a 1-5 rating. We then take that to help rate a policy.

To give you 100% disclosure, I am a P&C underwriter for a top 5 insurance company.

Edit: with that said, it shouldn't change it that much. Most likely there was some major lifestyle change that affected it (turning 25 and marriage are two big ones as others have mentioned).

 

[swbsam]

Originally posted by: KB
Did you just reach age 25 or just get married? A similar thing happened when I turned 25 and being married lowers your insurance quite a bit.

I was 27 (wife 26) and married for 3 months when we first got insurance together, now we're 28 and 27.

 

[Gibson486]

Originally posted by: DisgruntledVirus

Originally posted by: Gibson486
depends on state

I believe it's currently every state except CA that we look at credit rating to rate a policy.

We don't get your actual credit report/score though, we simply get a vendor that reviews the credit rating and puts it through the application that gives you a 1-5 rating. We then take that to help rate a policy.

To give you 100% disclosure, I am a P&C underwriter for a top 5 insurance company.

Edit: with that said, it shouldn't change it that much. Most likely there was some major lifestyle change that affected it (turning 25 and marriage are two big ones as others have mentioned).

I believe you...but I think MA is also on that list too.

 

[swbsam]

Originally posted by: DisgruntledVirus

Originally posted by: Gibson486
depends on state

I believe it's currently every state except CA that we look at credit rating to rate a policy.

We don't get your actual credit report/score though, we simply get a vendor that reviews the credit rating and puts it through the application that gives you a 1-5 rating. We then take that to help rate a policy.

To give you 100% disclosure, I am a P&C underwriter for a top 5 insurance company.

Edit: with that said, it shouldn't change it that much. Most likely there was some major lifestyle change that affected it (turning 25 and marriage are two big ones as others have mentioned).

Interesting... I won't over think it 🙂

 

[Greenman]

Originally posted by: DisgruntledVirus

Originally posted by: Gibson486
depends on state

I believe it's currently every state except CA that we look at credit rating to rate a policy.

We don't get your actual credit report/score though, we simply get a vendor that reviews the credit rating and puts it through the application that gives you a 1-5 rating. We then take that to help rate a policy.

To give you 100% disclosure, I am a P&C underwriter for a top 5 insurance company.

Edit: with that said, it shouldn't change it that much. Most likely there was some major lifestyle change that affected it (turning 25 and marriage are two big ones as others have mentioned).

It's my understanding that CA uses credit score as well. The reason I think that is that when I was shopping for insurance I was asked for my SSN. When I asked why they needed it I was told that they had to run my credit. I explained that I wasn't asking for credit, that I intended to pay for the entire year in advance, the nice fellow then explained to me that my rate would based on my credit score.

 

[DisgruntledVirus]

Originally posted by: Greenman

Originally posted by: DisgruntledVirus

Originally posted by: Gibson486
depends on state

I believe it's currently every state except CA that we look at credit rating to rate a policy.

We don't get your actual credit report/score though, we simply get a vendor that reviews the credit rating and puts it through the application that gives you a 1-5 rating. We then take that to help rate a policy.

To give you 100% disclosure, I am a P&C underwriter for a top 5 insurance company.

Edit: with that said, it shouldn't change it that much. Most likely there was some major lifestyle change that affected it (turning 25 and marriage are two big ones as others have mentioned).

It's my understanding that CA uses credit score as well. The reason I think that is that when I was shopping for insurance I was asked for my SSN. When I asked why they needed it I was told that they had to run my credit. I explained that I wasn't asking for credit, that I intended to pay for the entire year in advance, the nice fellow then explained to me that my rate would based on my credit score.

I don't underwrite personally for the entire country, so I can't tell you 100% that CA does/doesn't. Last I heard (~6-9 months ago) CA was not able to use credit ratings to make decisions on policies with. That may have changed, or may not be entirely accurate though.

Also, agents don't know rules/etc for everything. This is misconception #1, that your agent will know the answer. The agent doesn't write the policy, nor do they know the rules and rating guidelines. The agent is there to sell the policy, make changes to it, and do the "human" part of writing insurance. The agent is not there to underwrite the policy. So, the agent might have said they needed it to check your credit score, but that doesn't mean it's the case.

With that being said, there are many different lines of insurance and I can't tell you 100% how another company does it. Nor can I tell you if that's an accurate rating, because I don't have all your information. Every state has different rules and rates, so I keep current on the ones relevant to my job so I might not know if CA allows us to use credit scores.

Gibson486, MA could be on that list as well (New england states are a region that has a few states with abnormal guidelines, and along with CA, TX, FL, and NC make up most of the states with deviations from countrywide guidelines).