Question Car Insurance Checking Credit Reports?

[breezyday]

[liz417]

Hey Breezy,

I was wondering the same thing. I am filing ch 13 in Aug/Sep and when I get my payment confirmed, I wanted to start cutting my budget. I have Allstate right now for house and 2 newer cars, but when I went to State Farm and AAA to get a quote, they told me they would run my credit and *that* would determine how much I would have to put down as a down payment...yeah right! I've read that some people go with Gieco (sp?) insurance or a smaller/brooker company that is a little more forgiving with bankruptcies.

Good Luck and let me know what you decide.

[Frogge]

Yes, another one of my concerns as well. Here in KS the insurance is high anyway (tornados and all)--plus I had a fender bender and a couple speeding tickets this past year so I'm worried about the credit implications on my Farmers policies as my credit is tanking. I think they run an annual review, does anyone know if that's accurate?

I wasn't even thinking there were any BK friendly ins. co's out there... that's good to know.

[liz417]

...I think they run an annual review, does anyone know if that's accurate?

I wasn't even thinking there were any BK friendly ins. co's out there... that's good to know.

Yes, they do. I had them about 5 years ago and for whatever reason, they run a credit check.

[laurannm]

Where you live also plays a factor in whether or not insurance companies can perform "credit profiling" when determining rates. For example in MA auto insurance companies are not allowed to pull credit when determining rates

[chloe0724]

I got notification from State Farm (after being a perfect customer for 15 years) that they may or may not renew my car insurance when the premium comes due.

Thank you very much!!!!!!!!!

[BK2008]

I have Allstate in TX, so far as I know, they have not run my credit at each renewal. I think they do if I change the type of policy I have (I have the old time policy, am not on the 'accident forgiveness' program.) If I were to swich to it, then they would run my credit.

Which is kind of stupid, what has BK got to do with my driving record?? It would be damned inconvenient for me to wreck my car (not like I have a whole stable of them), and I'm not going to get rich off of a fender bender settlement.

[AngelinaCatHub]

Believe it or not, the credit report gives supposedly a thumbnail view of your stability, and responsibility. It isn’t fair, and they probably won’t admit to that, but they judge a person on how well their history is, not taking in consideration you may have been golden a year ago, and got sick and had to bk and you are now tin. That is a fact and was told to me by an insurance person. ‘Hub

[BK2008]

Well, that sucks. And while they're considering my 'stability' thru FICO, are they even looking at the fact I've been a multi-policy holder for well over 20 years, have file 3 claims in all of that time (one an actual car accident, one I hit a deer standing in the middle of a freeway, one I backed into my garage and damaged my tailgate). Prolly not.

I would LOVE to go back and figure out how much in premiums I have given them over those years, I know they dont compare to the damage claims I filed.

[Cali]

Everywhere I've lived they have ran a credit check for insurance.

And I do think it depends on where you live if they can deny you a renewal.

[BK2008]

I'm quite sure they didn't run my credit...my renewal was 6/27, the BK was well underway, and my rates didn't change.

[Flamingo]

Check with your State Insurance Department to see if your state allows credit profiling. If it does, your credit will be taken into account for a new policy or your yearly renewal. Some states have eliminated credit profiling but there are still many which allow the practice.

[stressin]

I have been worrying about this as well. My credit is trashed because of a recent business failure--which is also the reason for my bankruptcy. I am filing as an individual. Thing is--I think our insurance--through USAA is in my husband's name, and I am on his policy. I am wondering if that will help. Also, although I will be claiming our USAA credit card, my husband will still be paying on the account and it is current. Will this help in terms of our insurance rates staying low. I am in my late thirties with no accidents, tickets or claims--knock wood.
It really does seem unfair that we can have a golden credit score for decades--mine was in the mid 700s for pretty much all of my adult life, and then my decision to attempt a small retail business--and having basically the entire economy collapse in the year and a half after opening--and now they think I am a greater insurance risk.
I hope that congress seriously considers this. I think that credit profiling for insurance purposes should be made illegal. So many bankruptcies are for medical bills, failed businesses, etc. Even if the bankruptcy is simply (never really simple, I know) but even if it's due to excessive credit card debt, that still doesn't seem to be relative to driving risk, in my opinion.

[treehugger1]

Some states only allow a credit report for insurance purposes to be obtained upon initial application for insurance.

My state attempted to get the voters to disallow the use of credit as a determining factor in insurance premiums. The lobbying and advertisements by the insurance companies convinced folks that others' bad credit was causing their insurance to go up. People bought it and voted the law down. So, the old law remains unchanged; credit report can only be obtained upon initial application. While this is not a bad thing, it does have an effect upon your initial insurance payments if you choose to change insurers.

I have 38 years of driving experience with no costs to an insurance agency, aside from windshield claims and one accident with a deer, yet I would be frightened to apply for a new insurance policy with my credit.

Others mentioned GEICO and I do believe they are not as concerned with credit as they are with your potential claims history. Its hard to know for sure. GEICO is part of the Berkshire/Hathaway semi-private consolidated corporations owned by Warren Buffet. I would assume Buffet understands risk, and what is associated with risk, better than most folks. They never pulled a credit report when I applied. But, they did ask many questions related to past accidents, tickets, etc.

[liz417]

Others mentioned GEICO and I do believe they are not as concerned with credit as they are with your potential claims history. Its hard to know for sure. GEICO is part of the Berkshire/Hathaway semi-private consolidated corporations owned by Warren Buffet. I would assume Buffet understands risk, and what is associated with risk, better than most folks. They never pulled a credit report when I applied. But, they did ask many questions related to past accidents, tickets, etc.


Treehugger1,

Good to know, thanks for the info!