Auto Insurance Without Credit Check Companies

Many auto insurers dont realize their credit score greatly affects the rates of personal auto insurance coverage. Lots of people discover at policy renewal time a change in a credit score for the worst comes with a surprise. A current insurer will not offer a renewal and it becomes more than difficult to find new coverage. Cancellation could occur after years with the same company simply because of a ding on this important document. Countless people are unaware of how your credit score affects auto insurance.
With a poor credit rating, unfortunately an auto insurance provider has the option to cancel or not renew coverage. Most auto insurance companies use credit scores as a main component in determining whether or not to insure for auto coverage and what to charge for auto insurance rates. Nearly all insurers are searching for the cheapest coverage rates no matter what their credit rating. This is when a conflict comes into play.
If your credit score isnt exactly where you would like it to be or you have less than perfect credit, this doesnt necessarily mean you will never find an auto insurer for your vehicle. This simply means a little more research is needed to locate an insurance provider that has no credit check auto insurance and ideally finding the cheapest auto insurance rates as well.
Why do they need my credit score anyway to determine my car insurance rates?
Many of these companies review your credit score and use it to make a determination of how consistent and trustworthy you will be. According to the businesses using this method, it is a good indication of your financial steadiness and reliability. This is not necessarily true as many people know.
How is it used
All insurance is based on risk management or underwriting. This is a complicated statistical method to set rates built with a number of factors. Historically credit scores where not included in this calculation. Times have changed and they now play an enormous role in the data used for the process.
Based on this process information, insurance providers have formed an opinion that the lower a drivers or policy owners credit score is; the more likely they are to file a claim against their insurance company. Along with filing claims they also feel a policy owner will exaggerate claims, commit insurance fraud or make payments late. All of these ideas are formed from a little three digit number following you around for life.

Whether you think its fair or not, this is what this number reflects to insurance providers and why it is an important piece of data when obtaining auto insurance and the rates you pay for this coverage.
Realistically a credit score will not tell if you are or are not a criminal when it comes to insurance. Simply having poor credit doesnt make you automatically a culprit for insurance fraud. Though, it does group you with certain individuals more likely pay higher rates for coverage or lose their coverage because their score is not up to the car insurance companies standards for a good insurance risk. It is difficult to discover you are deemed untrustworthy or a possible criminal based on a number.
What is a good score?
Car insurance companies consider a credit score or credit rating above 700 a good risk. These folks are offered the cheapest or lowest auto insurance rates or best coverage at the cheapest prices. Anything below 600 is a bad risk. Finding one this low definitely means higher auto insurance rates.
What else do they look at?
There isnt a lot of wiggle room with these numbers between the good and the bad. However, remember there are other factors taken into account when accessing risks using underwriting data in auto insurance coverage. This means if you happen to experience a six month lay off from your job last year and your credit numbers dipped, there are still other factors being used to rate you. These are elements which possibly raise or lower your risk factor.
These include your driving record, age, sex, whether you are married or not and even where you live makes a difference. A driving record means do you have any tickets or moving violations? Any car accidents in your past? Even those where you were not at fault are not good for the cause. Do you drive your car to work every day or take the bus? All of these things are taken into one application, processed and out of the other end pops your car insurance rates. Not all insurers have the same data for underwriting customers. Although these are the most general, some will have things like if you smoke or not included as well.
If you would like to know specifically, ask the company. Many will share this information with you.
Where do I find companies that dont use my credit score for auto insurance rates?
There are companies that exist that dont count your credit score into personal risk factors for what you pay for rates. If are concerned your credit score has you paying a higher car insurance premium than necessary or you were dropped from renewal because of a credit score find one of these auto insurance companies to get a quote for your same coverage. Surprisingly the difference could be substantial.
Several companies that dont use your credit score for rates are Allstate, Progressive and 4AutoInsuranceQuote.org. Although these are some of the bigger boys, there are many more. Each state has identified which companies will sell policies to their citizens and this will vary.
If you would like to know which insurance companies are practicing for an individual state, please contact the states Insurance Commissioner Department. Investigate numerous companies giving online insurance quotes to determine what you will likely pay for various ones. Many of these will likely offer free online quotes. This lets you get the best coverage for the least amount of money.
Is there a catch to using these companies?
More than likely, insurance companies that dont use credit scores generally have an overall higher risk pool. The risk pool is an underwriting term to identify the likelihood of a claim filed against the policy. This higher risk is shared across the board to all insureds in one form or another, generally in the form of money or coverage. Typically they have slightly higher rates for identical coverage with another company that uses the credit score data. Another scenario is less coverage for the same price.
What are some of the benefits?
It is not as bad as it seems. The same coverage with the no credit check company could only be a couple of hundred dollars or a higher deductible. Another situation is finding less coverage with them for the same price by only a tiny fraction. This is why comparing and shopping around makes an enormous difference in what you will eventually have for a policy.
One huge benefit countless customers discover is by not paying an additional $500 a year for the credit check company coverage, they are capable of working to improve the credit score that hurt them. They make this number better much faster. This means they will get the better coverage for the least amount of money.
Cherish your credit score
Finding cheap auto insurance is a pipe dream of every car owner. Investing in a good driving record is only one of the instruments car insurance companies use to determine what you will pay for your car insurance rates. Your credit score is a part of a larger mix in the formula they use.
With credit scores being used to find employment, housing and insurance it is certainly valuable in lots of areas of your life. This means taking care of it. When you are blindsided with events that negatively influence it, do everything possible to get it back on track.
When it is not your fault
Your credit score is a number to cherish and hold dear. However, there are times when things are simply out of your control that influence this number. For an example, during the holiday season for several years there have been identities stolen. Thieves in this category will cost you dearly. All of these situations are breaches of security by a store or merchant and not the unsuspecting customer.
This identity theft has included fraudulent financial purchases and things such as overdrafts the real account holders are responsible for. When you are crippled by another person's actions where your credit is concerned, there is no way to reflect this on your report for anyone reviewing it. While working to resolve this issue the incorrect information on the report is still owned by you.
Do everything to fix this as soon as possible and remove any erroneous material not owned by you. Check your material often to make certain all is correct.
In conclusion
One thing countless people do not consider is a credit score inquiry from any entity will negatively effect or lower this number. That's right. When they check your score they are costing you valuable points. This is true whether you take the insurance coverage offered or not. This is simply another reason to consider alternative to these types of businesses. If you are unable to afford the hit, do not hesitate to avoid it by bypassing the process.
Good driving records are extremely important in calculating underwriting and risks. Lots of folks in a situation with a low score and searching for coverage will attempt to offset this by keeping a wonderful driving record.