Earlier, auto insurance providers would reward customers who had a good driving record, credit history, and paid insurance on time. However, all of that seems to have changed now as auto insurance providers no longer seem to care if you keep up to your payment schedule and have a good credit record etc. In the present scenario, in case you or your spouse lose your job due to the economic downturn, auto insurance companies will still nail you with a hike in premiums or even cancel your policy.
However, one fails to understand the connection between credit history and auto insurance. In the present scenario why are auto insurance providers still carrying out a credit check for auto insurance? Although this is a question that has been troubling us for quite some time now, this is a practice that is still prevalent in the auto insurance industry. Since, auto insurance is mandatory in all states in the US, how can auto insurance companies deny extending coverage or even charge such exorbitant fees? In fact, the answer lies in the question itself. Since, it is mandatory to have minimum coverage as prescribed by the state, insurance providers think they can do as they please.
Luckily, there are still quite a few companies,which don’t run a credit check prior to issuing insurance. Although it is not really easy to find these companies, they are still out there. No credit check insurance is a blessing in disguise,especially for those who are going through a difficult phase due to a loss in job as well as other things that may have gone wrong in the last few years.
Finding no credit check auto insurance is really difficult because of the way the auto insurance companies think. One might think that credit is directly related to risk and hence the better the credit, the better would be your driving skills. However, it is not as straightforward and simple as that. Auto insurance providers view the situation in its entirety and those who are found to be more responsible with regard to financial matters generally are better drivers – this is how they see it. Hence, those who are perpetually in bad credit and file claims more often or even falsify claims, are considered to be high risk as far as auto insurance companies are concerned. They don’t go by individual situations. Instead, they go by the trends of the entire group.
