Credit ratings and driving history can influence your auto insurance premiums


We’ve all seen the advertisements on television: Auto Insurance Coverage! Low cost even with bad credit history and bad driving history! Well, in reality, if you go with any respectable auto insurance provider, your credit history, and definitely your driving history, will greatly impact the cost of your auto insurance premiums. Why? Well, it’s quite simple and logical.

Auto insurance providers are companies, and what do companies do? They sell you a product and make a profit at the end of the day. For this reason, auto insurance providers are wary of people with bad credit ratings and/or bad driving histories.

You may not have even known this, but auto insurance companies do check your credit rating, and yes it’s perfectly legal for them to do so. Just as it is legal for other companies that are selling you a service, even your cable company runs a credit check on you.

If you have a bad credit history, it means that you have failed to pay your bills on time, or pay them at all, in the past. This means companies are going to view you as high risk or unwanted clientele. If they sell you auto insurance, on the ‘promise’ you will pay your premiums and you get into an accident in which they pay for the damage, only to have you stop paying your premiums, they are at a potential loss of thousands.

They make billions you say! Yes. They wouldn’t make billions, however, if they insured people who have a pattern of not paying their bills; people who have a pattern of using a service or purchasing something and then not actually paying for it. It’s all about the bottom line.

If you have a bad credit history when applying for auto insurance, expect that you will only be approved for the minimum amount required by law and not much more, if anything at all.

If you have a bad driving history, they will tag you as someone frequently distracted on the road or someone with bad driving habits that often end up in disaster. If an insurer insures someone with a bad driving history, they will lose money in the end because of the amount of cash they will have to be frequently paying out to cover the costs of the accidents.

If you manage to get auto insurance coverage with a bad driving history, you should expect your premiums to be extremely high. The more accidents on your record, the worst it will be for you.

If you have a history of bad accidents or car theft they may also tag you as being a potentially fraudulent claimant and deny you auto insurance coverage. They don’t want to insure people they feel are going to try to rip them off.

Also, based on numerous studies as of late, bad credit history and bad driving histories seem to go hand and hand. Insurance companies have caught on to this and if you are in both boats at the same time, it will greatly increase your insurance premium rates.

So, in the end, despite all the fast-paced talking ad salesmen on TV, when it comes to getting auto insurance coverage with a bad driving history or bad credit history, you will be highly impacted on whether or not you can get any and the rates they will be. This is true for almost any respectable auto insurance provider.