Online Auto Insurance: Credit Rating Can Have Significant Effect on Premiums

An analysis of regulator-provided data shows average Nevada car insurance premiums could increase by 75 percent when going from the best possible credit rating to the worst possible.

Online PR News – 25-August-2011 – – A group of Massachusetts insurance agents recently submitted a proposal to create a new law that would bar insurers in the state from taking a motorist’s credit history into account when determining rates. Though the proposal was limited to Massachusetts coverage, the issue is alive in most states around the country, and credit scores can seriously impact rates, according to industry experts.

To quantify the effect that credit can have on rates,—a provider of free auto insurance quotes over the Web—looked at price data provided by Nevada regulators.

The Nevada Department of Insurance publishes sample rate comparisons from about 28 insurers for a handful of driver profiles annually. And in the latest publication, three of the 18 driver profiles were identical, aside from credit rating, which allows the effect of this factor to clearly be seen.

According to data included in the publication, credit score can affect available premiums by hundreds to thousands of dollars in Nevada. The following are the results of the analysis:

• When the hypothetical driver had the best possible credit rating, average six-month premiums were a reasonable $839. The lowest rate available was $316, while the highest was $1,518.

• When the credit rating is downgraded to average or neutral, the average six-month premium rose to $1,049—a 25 percent jump. The lowest rate available in this scenario was $537, and the highest was $2,080.

• But the real impact of credit scoring can be seen when the hypothetical driver was given the worst possible credit score. When this happened, average six-month premiums increased an additional 40 percent to $1,465. The lowest available rate was still $544, but the highest possible rate skyrocketed to $3,116.


To learn more about this and other insurance issues, readers can go to where visitors will have access to informative resource pages and quote-comparison generator that can help shoppers efficiently evaluate their coverage options.

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