Your personal credit will affect your price of car insurance
In many places, having car insurance is mandatory. If you are caught driving without it, you can end up getting a summons to go to court. You can also end up losing your license. Should you be responsible for an accident, you could also find yourself involved in a lawsuit in order to get you to pay for the damages of the other parties involved in it.
While most of us understand that our age, length of time we have had our driver’s license, and our driving record affect our price of car insurance there are some other factors you may not know about. Your personal credit rating may cause your price of car insurance to increase.
If you haven’t already heard about this, you may be like me and get a letter in the mail one day you aren’t expecting. I opened up my car insurance bill and instead of it being for $97 it was for $127.55. I was sure it was just a simple mistake and didn’t worry too much. My insurance agent is always very friendly so I gave them a call.
You may not think that $30 is much to worry about, but it definitely adds up over the course of the year. I figured it was a mistake so I called my car insurance agent. This is when I was told that due to a check of my credit report I was considered higher risk and thus the increase. I tried to explain the credit report issue was the result of high medical bills for my son’s accident last year but it didn’t matter.
I figured it may be time to start looking for another car insurance provider. Yet after a handful of phone calls and online quotes it was apparent that this wasn’t an isolated instance. Rather it had become the norm among the various car insurance companies out there. In fact, I soon learned the prices were better offered by my current car insurance company than switching to someone else.
I really think that insurance companies are quite a rip off, and this just added more fuel to the fire. My perception is that you pay into insurance for various reasons and then once you have to file a claim they will increase your premiums. I also worry about my homeowner’s insurance going up next for the same reason.
This is just one more reminder though to people of all ages that your credit is something you really have to take care of. While there are unforeseen circumstances you will have to deal with, many issues with personal credit can be avoided. You don’t want to constantly have additional fees with your bills due to a poor credit rating.
Those that haven’t established their credit history yet, you should be even more concerned. Make sure you are very responsible with your personal credit. The cost of your vehicle insurance is just one area where it is going to come into play. Everyone needs to keep a good eye on their credit report too because mistakes can lead to paying out more money.
