Most major car insurance companies like GEICO, Progressive and State Farm factor in your credit score when giving you a quote. Some smaller, regional insurers skip credit checks, though their coverage options (and available online information) can be limited.
California
Insurance companies in California don't use credit-based scores or your credit history for underwriting or rating auto policies, or setting rates for homeowners insurance. As a result, your credit won't impact your ability to get or renew a policy, or how much you pay in premiums.
Most U.S. insurance companies use credit-based insurance scores along with your driving history, claims history and many other factors to establish eligibility for payment plans and to help determine insurance rates. Again, except in California, Hawaii, and Massachusetts.
Does credit score affect car insurance rates? Yes. A higher or lower credit score can have a big impact on your insurance rate. Poor credit increases full coverage rates by 86% compared to good credit.
Most insurance companies use your credit history to help them decide whether to sell you insurance and how much it will cost.
Poor driving history is a top reason drivers can face challenges obtaining auto insurance. A track record of collisions, traffic violations, or DUI convictions can make getting coverage difficult and extremely costly. Insurers consider drivers with such records high-risk; some may deny coverage altogether.
Have tickets or accidents on your record? State Farm and Geico are among our top picks for high-risk drivers.
State Farm is the cheapest major car insurance company for drivers with an accident or speeding ticket on their record. After an accident, full coverage insurance from State Farm costs an average of $154 per month. That's 41% less than the national average.
Reasons you may be denied car insurance
You have several moving violations and a less-than-perfect driving record. Your license has been suspended or revoked. You drive a fast, high-performance vehicle. You are too young to buy your own insurance policy.
If you leave out information in the quoting process about accidents you've been in (even minor ones), your policy rate may be higher. If you forget to provide details about your significant others' driving history, such as speeding tickets, this may lead to a higher rate.
GEICO may charge a higher rate, for instance, if it finds information in your driving record that wasn't disclosed in the application. The insurer may also run a soft inquiry on your credit report to develop a credit-based insurance score, which could also impact your rate.
Using the sensors in your phone, the GEICO Mobile app automatically logs your driving behaviors-like how hard you brake, how far you drive, and how often you use your phone-and calculates a safe driving score. GEICO then factors your score into your insurance rate.
Many auto insurers use credit data to determine your premiums because there is a proven correlation between a lower credit score and a higher likelihood of filing an auto insurance claim. As a result, people with bad credit pay around 143% more for car insurance than people with good credit, on average.
If I add a driver will it affect my premium or rate? In some cases, adding a driver to your policy can affect your premium, but not always. Many factors determine the cost of adding a driver, like driver relationship, age, driving history, past claims, and driving records.
Expunge your record
In California, for example, an infraction will be automatically expunged after three years if you have no other violations during that time and you've never been convicted of a DUI.
Being turned down for insurance, or not having your policy renewed, happens when an insurer decides it can no longer continue to cover you. This can occur for several reasons, such as changes in your situation that increase your risk, problems with credit history, a criminal record, or too many claims in the past.
Some factors that may affect your auto insurance premiums are your car, your driving habits, demographic factors and the coverages, limits and deductibles you choose. These factors may include things such as your age and your driving record.
A risk that an insurer will not take on. For example, this may be where an event is inevitable (such as a terminally-ill person's death), gradual (such as rust or corrosion) or against the law.
On average, drivers with poor credit pay 113 percent more for full coverage car insurance than those with excellent credit. California, Hawaii, Massachusetts and Michigan prohibit or limit the use of credit as a rating factor in determining auto insurance rates.
In most cases, the highest credit score possible is 850. You can achieve the highest credit score by taking a variety of essential steps. Still, for many people, it's difficult considering the range of factors that dictate the highest credit score possible.
Can I be denied coverage because of my credit? Yes, any insurance company has the right to deny coverage. Likely, poor credit won't be the only reason you're denied auto insurance, but it can be a major contributing factor.