The credit score and your history are essential when discussing anything financial. Car insurance is no exception. However, unlike credit card applications or loans, insurance companies understand that drivers have specific needs.
They are dealing with the insurance on that car, so even though they use your credit information just like other institutions, they will not typically deny you coverage. They may, however, boost your premium amounts to ensure that their interests are covered, which is making a profit.
There are a few things that you need to know when trying to obtain car insurance with bad credit, so let’s jump right in.
- What They Look For –The insurance carrier will look for specific things when checking your credit report. The most important will be your score, but other than that, the next most important thing to them is your payment history. They want to know that you pay your bills on time, every time. Even if your score is not so great, if your history of making payments is good, you will rank slightly lower on their risk scale. This means that your premiums will be lower than you may have expected initially.
- Ways To Lower Your Premiums – Even if your credit is at the bottom of the scale, you will still have some options that will help you lower the insurance carrier’s premiums. First of all, decide if you actually need a comprehensive policy or if you can get by with the basic level of insurance required by law. You can also go with a plan that allows the company to track your driving habits. Lastly, based on real-time numbers, you can opt for a policy that covers you by the mileage you put on every year.
- Compare – The best thing you can do when looking for an affordable policy is to take advantage of online comparison platforms. These sites will compare car insurance policies for you and then send you offers from some of their partner sites willing to work with you. Not every policy will be the same, and not every carrier will give you reasonable rates. However, never go with the cheapest unless you have taken the time to compare the coverage details between your options. The cheapest is not always the best.
- Be Careful With Claims – You may already understand this, but every time you file a claim, your insurance premiums will go up. That is why reducing the number of claims you file with your carrier is so important. Unless a serious accident needs to be reported, it is often better to get the issue fixed on your own without telling the insurance company about it. For example, if a rock flies up and cracks your windshield, it may be easy to file a claim to have it fixed, but it will cost you extra cash in the end. It may be better to pay for the repairs, depending on the car and the windshield needed in that car.
Having bad credit may make finding an affordable insurance policy rough but not impossible. Using online platforms can save you a ton of time and get you in touch with the insurance provider that will give you the best rates and the perfect coverage. Never think you owe your business to any specific agent because they may not always be the best option. They are in business to make money, and you are in search to save money, so it is not always in your best interests to stay with the insurance company that your parents had.