Dave Pimper

402.721.0809

Insurance Read Time: 2 min

Does Your Credit Score Affect Your Insurance Rates?

While the vast majority of insurance companies use credit-based insurance scores to help determine the price of insurance, it is banned in the states of Massachusetts, Michigan, Hawaii, and California. Some states only allow it as a factor for property insurance like auto and homeowners insurance. Other states allow it to be used with any type of insurance.1

Several Factors

Generally, an insurance company will use a credit-based insurance score as just one factor in its underwriting process. Other factors may be considered, depending upon the type of insurance. For example, with auto insurance, other factors could include your zip code, the age of the drivers, the make, model and age of the car, and the number of miles you drive annually.

The use of credit scores to determine insurance rates is rooted in research that has shown individuals with lower credit scores tend to file more claims.2

You can ask your insurance company if a credit-based insurance score was used to underwrite and rate your policy, and in which risk category you were placed.

If you want to improve your credit-based insurance score, you should consider taking the same steps you would to improve your credit rating: make timely debt payments, clear up past disputes and keep credit card balances low.

1. Forbes, February 1, 2022
2. ValuePenguin.com, June 12, 2022

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG, LLC, is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Share |
 

Related Content

Asset and Account Consolidation for Your Estate

Asset and Account Consolidation for Your Estate

Investment account consolidation is important to consider for estate planning.

The Facts About Income Tax

The Facts About Income Tax

Millions faithfully file their 1040 forms each April. But some things about federal income taxes may surprise you.

Surprises

Surprises

Making the most of surprises is a great reason to work with us.

 

Have A Question About This Topic?







Thank you! Oops!

Pickleball in Retirement

Learn about the latest sport to sweep the nation with this informative article.

Exploring the Federal Student Grant Program

In this article, explore the benefits of the Federal Student Grant Program.

Financial Hacks for Millennials: Going Back to School

As we continue to readjust our lives to a global pandemic, you may be wondering if now is the time to use that time to go back to school to pursue a higher degree, or if you can build new skills in other ways.

View all articles

Tax Freedom Day

Assess how many days you'll work to pay your federal tax liability.

Long-Term-Care Needs

Determine your potential long-term care needs and how long your current assets might last.

Annuity Comparison

This calculator compares a hypothetical fixed annuity with an account where the interest is taxed each year.

View all calculators

Investment Strategies for Retirement

Investment tools and strategies that can enable you to pursue your retirement goals.

Protecting Those Who Matter Most

The importance of life insurance, how it works, and how much coverage you need.

5 Smart Investing Strategies

There are some smart strategies that may help you pursue your investment objectives

View all presentations

What Smart Investors Know

Savvy investors take the time to separate emotion from fact.

Retiring in a Post-Pandemic World

Imagine your ideal post-pandemic retirement with this animated video.

It May Be Time for a Financial Checkup

It’s never a bad time to speak with your financial professional about changes in your situation.

View all videos

Web site design by  Sorensen Web Design