Credit Scores and Auto Insurance

Credit Scores and Auto Insurance

By: Rob Parker

In today's world your credit score is used for almost everything and your credit history is examined when you apply for mortgages, personal loans, bank accounts, credit cards, and sometimes even when you're applying for a new job. As well, your credit score is a factor in whether or not you can obtain auto insurance, and how much you will pay for it.

Insurance companies use credit scoring to determine your insurability because they believe there is a correlation between your consumer credit history and whether or not they are likely to have to pay claims on your behalf. They also feel that people with good credit are less likely to suffer from severe insurance losses.

While most insurance companies also use your age, driving record, type of vehicle and your place of residence to determine your premium, your credit score is also factored in. If you don't have a credit history at all you may not be eligible for some discounts, and your premium may be higher. On the other hand, if you have a poor credit score, you may find that even with allowable discounts your premium is still higher than it would be if you had perfect credit. If your credit is extremely poor, you may be denied standard coverage and have to look into pool insurance, which is state-sponsored minimum insurance for those with bad driving histories, poor credit, and low incomes. You cannot be denied ANY coverage, but you CAN be denied the best coverage.

Can They DO That?

You may wonder if an insurance company can look at your credit information without your permission. As long as you have applied for insurance, the Federal Fair Credit Reporting Act allows the use of credit information for "reasonable procedures." Determining credit worthiness for insurance is such a procedure, though your insurer is still required to maintain confidentiality and accuracy. They're also required to notify you that a credit report was requested.

While some insurance companies will look at your actual credit report, many use an "insurance credit score" which is a derived by using statistics to determine your likelihood of having a higher-than-average insurance loss. It's comparable to the kinds of scores mortgage companies use to determine your likelihood of repaying your loan. When developing your credit score, your insurance company will look at the following factors:

Public records, including charge-offs, collections, bankruptcies, foreclosures, and other liens

Payment history, which includes the frequency and number of late payments, as well as the degree of lateness

Number and type of open credit accounts, including credit cards, store charge cards, and loans

Available credit: the ratio of available credit to the balances on your various credit cards.

Length of history: how long you have had reportable credit.

Every company uses different factors, and insurance credit scores are not identical to mortgage credit scores, though similar information is used. Unlike the mortgage industry, however, insurance companies are not required to tell you your score, and your agent may never see the number itself, but will only know what it qualifies you for.

If you have anything on your credit that may be an issue, tell your insurance agent up front, so that they are prepared, and can do their research ahead of time. This is especially important if you are dealing with in independent agent who sells insurance from more than one company. If there is incorrect information on your report, be certain to contact one or all of the three major credit bureaus. It can take up to thirty days for them to investigate and resolve any discrepancies.

Your insurance credit score may determine your level of insurability, but one thing it doesn't measure is your worth as a person. Even the worst credit can eventually be repaired, and once you have a policy and are known to make premium payments on time, some of the discounts that were originally unavailable to you may become so, after the fact.

Do you panic at the thought of auto accidents? Read how to be prepared should you ever have to file an insurance claim.

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Things You Must Consider Before Purchasing Car Insurance

Things You Must Consider Before Purchasing Car Insurance

By: Brian Garvin

After you buy your car, but before you run out and sign up for car insurance, it is a good idea to learn how car insurance works. Knowing how the insurance works is the best way to make sure that you get the car insurance that is right for you. After all, you don�t want to pay too much for a bunch of things you might not need, right?

There are a variety of different coverages that are involved in insuring your car: liability, collision, comprehensive, medical coverage, personal injury protection, uninsured motorist, underinsured motorist and rental reimbursement.

Different states have different requirements, so make sure that you know which types of coverage are required by your state. Most states require at least liability coverage, but it varies from there. Often, insurance companies will combine a lot of these different kinds of coverage.

It is also important to note that it might not be the best idea to go with the minimum insurance required by your state. You never know what might happen on the road and the last thing you want is to end up with hundreds of thousands of dollars in bills because you skimped on your auto insurance. This isn�t to say that you should buy tornado insurance in Hawaii, but think about what you might encounter on the road, and what you want to have covered.

For example, if you are in an accident and cannot drive your car, would you like to have a rental car provided by your insurance company? Do you want extra warranties for labor and parts in the event that your car breaks down? If you have leased your vehicle, you will want to invest in gap insurance. This is insurance that will pay the difference between what you still owe on the lease and what your car insurance covers in the event that the car gets totaled.

Think about the car you just bought. If it got completely totaled, could you afford to get it replaced? If you can�t, you will probably want to get collision and comprehensive coverage in your car insurance. Depending on how much your car is worth, it might even be worth the extra money to make sure that your car gets replaced in the event of a serious accident.

You should also look at your health insurance and homeowners insurance to see what kinds of coverage include damages involving a vehicle. Sometimes you will already be covered for something that you might have been tempted to add to your car insurance.

The best way to decide what kind of car insurance to get is to look at what kind of car you have, your budget and your environment. You will obviously want to have more inclusive insurance if you live in a crowded area where thefts and accidents are common. You might be able to get away with less if you have a less expensive car or you live in a low crime, low accident part of the country.

Learn the Lemons from the Straight MLM Winners and read about Network Marketing Leads from Brian Garvin and Jeff West at MLM Review Kings. This article may be used royalty free provided Bio & Links remain intact. Copyright � Mission Billion, Inc. All Rights Reserved Worldwide

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Car Insurance Tips and Tricks

Car Insurance Tips and Tricks

By: Melanie Williams

Did you get taught at school about liability, collision and comprehensive cover? What about deductibles and all the tips on how to get the cheapest car insurance? You probably didn't, but if you're one of the majority of individuals that drives a car, you've either learnt fast, took whatever insurance your relatives or friends advised or you're about to learn the hard way one day. Take the guess work out of choosing car insurance and read up so you can make an informed choice.

Many motorists pay extra on their rates for a small deductible, and yet they take the minimum liability coverage. You could probably afford that $500 deductible if something happened, but could you afford being sued for $400,000 in damages? Spend your car insurance budget wisely to protect yourself and your assets. Think about raising your deductible and using those savings to raise your liability cover. If you're worth more (you have a well paying job or you're studying for one) or you have a lot of assets obviously you've got more to cover than someone who doesn't. If you do have a lot of assets an umbrella policy may be worth considering to ensure all your assets are covered.

Check your health insurance policy, if medical bills after an accident are covered you can drop personal injury protection off your car insurance policy.

Keep your credit rating up, many companies use it to decide how much to charge you and even whether to insure you at all.

If you don't have an extra car make sure your insurance company will pay for a rental car if you have an accident. The expense of renting a car for a week while your car is being repaired could be a lot of.

Shop around for quotes, a good place to start is a comparison service. Compare quotes from a few different companies and read the policies to see how they compare. If you do switch policies make sure you notify your previous insurance company immediately and make sure there is no gap in your cover before your new policy starts.

Car insurance can be costly, fortunately there are a lot of discounts that you can be eligible for. Maintaining a good driving record is the best way to get cheaper premiums. Other discounts offered include; low-mileage, safety features, multi-policy, senior, taking a safe driving course and paying annually. Take advantage of all the discounts you can for the cheapest rates.

Teenagers can add significantly to your car insurance rates. Think about having your teenager use only the family's cheapest car and exclude them from other policies. Don't forget if your teen moves out to remove them from the policy. Just make sure you don't loan them the car when they come to visit! If you still want your teenager on the policy, find out if your insurer will give you a discount when they're away at school.

If your car has seen better days, and it's not worth much, consider removing collision coverage. The cost of your collision coverage might not be worth it when your insurer will only pay out your vehicles worth.

Make sure you understand what will occur if you have an accident and what choices you have. Will your insurer pay for original or only generic parts to fix your car after an accident? Can you choose your own mechanic or body shop if you have an accident? Read through your policy and make sure you're satisfied with it.

Make calling your insurer your number one priority after an accident. Most insurers have a time limit, usually around 48 hours for making a claim.

If you are unlucky enough to need to make a claim, get a copy of the accident report, keep all your receipts and make sure you record all the details of who you speak to. Make sure you include everything in your loss estimate. You may be entitled to claim sales tax and registration fees if your car has been totaled.

Put a bit of effort into getting your claim processed to speed up the process. Get some estimates and follow up your insurance company regularly to review progress.

Work with your adjuster to get a good outcome. If you don't agree with the amount offered, ask the adjuster for the reasons in writing. If you can't get a satisfactory answer keep your cool and investigate your other options. Speak to the manager of the claims department and request that your case to be reviewed, consider filing a complaint with the state insurance department.

To find out more about comprehensive car insurance and tips on saving money visit http://www.iblogcarinsurance.com, your number one source for car insurance information.

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Breakdown Cover : One of the Best Service

Breakdown Cover : One of the Best Service

By: Smith James

One of the troubles with long journeys in cars is that if it breaks down in between then it can be quite a handful trying to fix the fault. Particularly for people with little or no knowledge about cars. And if the car has broken at a place where you can find no help then it can be quite frustrating. It is here that break down cover proves its relevance and ensures that help is not far from such people. Indeed, break down cover is one way of seeing of any eventuality which arises due to car trouble during journeys.

The importance of such a service can simply not be negated. Specially for people who frequently go on long journeys it is a must as no one knows when they might require it. The biggest advantage of such a service is that it assures the assistance of a mechanic in such cases when the car has broken down and that too anywhere in UK. However, it must be added here that the type of facility provided differs from company to company. It is for this very reason that it is advised that people carefully go through the offer to understand what to expect from it.

Some companies offer the assistance of mechanics on the spot where as some offer to help from their nearest workshop. Then, there are some companies that offer in their breakdown cover, apart from roadside services, emergency accommodation as well. It is for this reason that people are advised to carefully scan the offer before signing. Advent of Internet has further eased the matter for people as now they can check all types of breakdown cover available and choose what suits them most.

Travelling by car makes the whole journey very easy and exciting but there can always arise a situation where one's car breaks down in the middle of a journey. Breakdown cover ensures that one is not devoid of help in such a situation.

About the author:- The author is an expert in car insurance UK, van insurance, breakdown cover, online insurance and has written a number of authoritative articles on this subject. His articles are widely read because of the clever tips and valuable advices he provides in them.

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