Why do some some insurance companies base their rates on credit scores? What does that have to do with driving records?
wow! Best credit !
An.Apple
Jin.
Why do some some insurance companies base their rates on credit scores? What does that have to do with driving records?
6 Comments
It has absolutely NOTHING to do with your rates, but insurance companies use this as an excuse to charge you more, the theory being the crappier your credit is, the higher the risk you are in filing claims.
If you are financially responsible, you are more likely to be a responsible driver. Not always, but usually.
You may not be required to give them your SS # but they wont be required to give you a quote if you dont.
People with bad credit dont pay their bills, Insurance companies send out bills. If someone doesnt pay, or pays late, that causes cancellations, and reinstatements to go out and it costs the insurance company money.
Also, There is a link between people with bad credit and insurance claims. Probably because people with bad credit usually have no money so they are more likely to put in a claim where as someone with money might decide not to go through insurance.
Just a ploy by the insurance companies to get more money. Also you are not required by law to give them your social security number. If you check the social security web site you will get a listing of who you must give your number to. Doctors are not on the list either.
Statistics have shown that people who have poor credit, misuse their credit, or have files bankruptcy are more likely to be involved in a wreck, or to drive in a reckless manner. This law is controlled by the states, as far as I know, I don’t think it’s just certain insurance companies, I think they all have that option. You will also find that males under the age of 25 will pay a far higher rate, then the norm. The reason, most males tend to be reckless, daring, those sorts of things………..remember those days of draggin’ main?
Farmers Insurance will not accept any new policy holders with even 1 claim. They don’t care whose fault it was, just that there was a claim. They run credit scores when they determine premiums. This way if you have no credit they get ya, some credit or bad credit. And if you think for 1 moment your safe at the top? After 2 years you get increases and by the time it’s all said and done……….might as well have had bad credit.
Bottom line……..
These companies are it the business of making money.