What Influences Car Insurance Rates And Why?

Credit Score

Although thought of by some as a myth, a customer's credit history does play a role in determining their insurance premium; the practice began in the 1990s. Customers with lower scores are seen as more likely to file claims or exaggerate claims to receive more money from their insurance companies. According to research, a customer's credit history can affect their insurance rate even if they have a clean driving record with no tickets or accidents. However, insurers cannot legally use your credit scores, to determine your rate, in California, Hawaii, and Massachusetts.

Legally, an insurance company is not obligated to show you the score they use to determine your insurance rate. This determined score may not only affect your rate but can affect your ability to be insured by certain insurance companies or how you pay for your insurance. Some companies may require you to pay for your coverage upfront if you have a low credit score.

Continue reading to reveal more information on how location can influence insurance premiums.