How much does your credit rating affect your car insurance premium?

The CSR from my company just told me that continuous coverage is much more of a discount than a good credit rating gives you. So, overall, about what percent do folks in the know think that the c...

The CSR from my company just told me that continuous coverage is much more of a discount than a good credit rating gives you.
So, overall, about what percent do folks in the know think that the credit rating matters?

Dave1001	Whatever else you say about California, we don't use credit as a factor in rating insurance. Anecdotally, I can tell you that people who pay their insurance bills regularly have fewer claims than people who don't. It makes total sense that credit would reflect this. Insurance companies claim credit as a factor since it is what is called a "moral hazard." In short, it means that what type of person you are can determine the frequency of claims. Right or wrong, like it or don't like it, the numbers bear it out.

mbrcatz	Never thought about it. There IS a significant difference between the rates for someone with a 400 and a 700. Maybe 30%? But that ALSO is going to vary wildly. I know that if you have a DUI, and a great credit score, Progressive is DIRT CHEAP. They are MORE heavily geared towards credit score, and don't offer ANY renewal discount. So my bottom line answer is, it's going to vary wildy from company to company, and the particulars of your policy.

Phil	Most auto companies now use credit score as a major factor in the rates they charge. It doesn't seem fair, but they have done the research and determined that there seems to be a relationship between bad credit and claim cost. Personally, I don't like this. I don't like companies obtaining information about me that is not related to the business dealing. As for the 'continuous coverage' you mention, this could be two things. If the CSR means that you have to have continuous coverage regardless of the company, then they have a point. If you have a gap in coverage, the insurance company that takes you on will generally be very expensive. If the CSR was talking about the discount you get for keeping your coverage with the same company, this isn't as important as your credit rating. You can get a couple of percentage point for staying with the same company. However, if your rates are high to begin with because of poor credit, this discount won't make them as low as someone with good credit.

Dr. Deth	i have heard that some insur companies DO charge more if your credit rating is bad - it doesn't make any sense to me, but they do it

sweetness1913	the CSR is right. Credit is a factor, in most states. However, prior insurance is a big premium reducer. Some states don't even allow credit rating to affect premiums (CA, I believe, and some others)

Don	Not every company uses the credit score to determine the policy amount. If you have had continues coverage with one company they probably will not change your rate if your score drops. If on the other hand you are looking for a new policy they might use it.

Dzo	Hi, There is not much connection between your credit rating and insurance premium. You can checkout http://www.autoloanguide.info for some useful tips. Good luck!