Fair Car Finance

A good number of drivers don’t realize just how much there credit score affects there auto insurance rate. Unfortunately what this means is that when you down on your luck financially expect your auto insurance premiums to go up. To many this is akin to kicking you when your down. Ask any Floridian that has had trouble paying there bills how much their car insurance premiums have goon up.

According to the insurance industry spokesperson, your credit score is one of the most important indicators used to determine your auto insurance rate and their reasoning is that many people having financial troubles are more apt to let policies lapse, which could cause a questionable accident during a grace period. Of course they also figure that a certain number in this category will fabricate an insurance claim just to get a little money. Those same figures also show that homeowners having trouble are more likely to commit arson.

These risk factors affect anybody that runs late on payments or have a hard time making the payments on their insurance through monthly payment plans. It is just a fact that those having financial trouble will opt in for the monthly payment option and if they are always late will fall into that grace period. If your constantly in that grace period or they have to continually call you then your higher maintenance and they put you in the same category as those who chose to drive without insurance.

It is easy to see how this could be a factor that insurance companies would want to consider in setting premiums, however, most people are completely unaware that a price rate increase is coming, which causes them to start the process all over, looking for a lower premium and getting bad ratings because of that factor. This process is frustrating to say the least for those who have had no claims, and most insurance companies don’t consider how timely you are in your payments with them.

Many people don’t realize that credit scores are considered ahead of tickets and accidents, which certainly doesn’t seem fair to those that are having a few financial problems, but have never had a ticket or accident on their record. Truth be told a lot of times there rates are higher than those with numerous accidents.

Because auto insurance coverage is required by mortgage and lien holders and is required by law in most states in order to register your vehicle, this problem becomes an issue that is hard to avoid. You will get tickets without insurance and you don’t want to be involved in an accident without it.

You never know when the insurance company will pull your credit report and re-figure your insurance premium, but you can rest assured they normally do it once a year. Even if you start to pay your bills on time it takes at least a year or more for this fact to start showing up on your auto insurance rates and premium. Unfortunately there is not much you can do if you have been having credit problems, just be aware that your auto insurance premiums are going to rise.