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Posted in Auto Insurance
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Question By
dslambe

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Why & How credit score affects auto insurance/health ins. premiums.
this seems nonsensical to me; just because I've gone through a bankruptcy (and had an economic downturn beforehand), WHY does that make my auto insurance go UP? same care, same maintenance, and NO claims - EVER. I fail to see how one even has anything to do with the other? Does this mean in the future, my credit score will influence what I pay for health care premiums? (To me), it boggles the mind!!!!!

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Insurance rates come from a variety of factors,  your rates may not have changed soley because of a bankruptcy.   That said, as far as why credit scores affect rates,  they are looking at the likelyhood of you making a claim, how much that claim is expected to be, and how much they need to take in to offset the future claim.   People with lower credit scores make more claims, its a fact.   People who cant afford to fix a $1000 fender bender will claim it to insurance, those who have enough to cover it themselves do.   Your credit score dropping increases the likelyhood you will need to make a claim and therefor increases your rate. Hopefully this unboggles your mind.

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