Although it is a controversial practice that has been banned in Massachusetts, Hawaii, and California; the use of credit-based insurance scores is pervasive. In fact, it is reported in a survey by North Shore Advisory, that 92 out of a 100 auto insurers utilize a credit-based insurance score. Fortunately, your credit is only one factor used including your driving record and claims history.
So what should you do?
1.) Monitor your credit and do what you can to maintain a good record. If you are getting high interest rates offers on loans and expensive quotes for your auto insurance policy your credit may be to blame.
2.) Shop your options and rates before you cancel a policy. Although the use of credit based is nearly universal for new policies , only 14% of insurers use it in terms of renewals.
3.) If you have good credit scores; you may want to look at your options for auto insurance. You may be able to leverage your good credit into a lower cost policy.
If you have any questions regarding your credit-based insurance score or want some help assessing your options, please give us a call at Kaplan Insurance. We are happy to help.