Car Insurance for Bad Credit Drivers
There are a number of factors that go into determining annual auto insurance premiums, like your zip code to your vehicle. Insurance rates are personalized to fit you and your driving situation.
One of the major factors when it comes to setting car insurance premiums is your credit score. Auto Insurance companies will use this score to figure out how much of an insurability risk you are. This is then reflected in your annual premiums.
But do not panic if you have a less than favorable credit score, Insurance Navy™ is here to help. There are a number of ways to find cheap car insurance for bad credit drivers, along with various steps you can take to get the best policy rates.
You may just have to take a bit more time with research and finding discounts for car insurance for bad credit, but it will be worth it in the end when you find the best car insurance rates.
Enter your ZIP code below to view quotes for the cheapest Auto Insurance Rates.
Auto Insurance and Credit Scores
This all may be a bit surprising (and definitely disappointing), but your auto insurance company can use your credit score to determine your driving behavior.
It is believed that credit scores tell car insurance companies how good or bad of a driver you are and thus how likely you are to file insurance claims.
People who pay their bills on time and, in turn, have a better credit score filer fewer claims as opposed to those drivers with low credit scores who are not financially responsible. These customer can end up paying some of the cheapest rates. How accurate this is is up for debate, but auto insurance companies swear there is endless data on the matter.
Despite whether you think it is fair or not, you still need to make sure you have the best credit possible.
Auto insurance companies will assess the following areas of your credit score:
- Credit history
- Bills payment history
- Credit inquiries
It is important to note that if you live in California, Hawaii, Washington, or Massachusetts, your credit score cannot be taken into account by insurance companies. It is illegal in these states for them to use it when determining insurance rates.
How Bad Credit Affects Car Insurance Rates
Drivers with bad credit scores will usually have to pay more for auto insurance. Much of the time, due to your credit score, you will be categorized in the non-standard coverage tier for car insurance for bad credit.
This can hinder the type of car insurance coverage you can get along with raising your auto insurance premiums. The worse your credit score is, the more you will be paying. That is the case so long as you are lucky enough to find the best car insurance coverage.
Some insurance companies may not offer you the cheapest policy due to your credit score, but it is still possible to find quotes for the best car insurance. Smaller insurers and insurance companies that specialize in non-standard auto coverage can provide you with some of the best coverage and quotes.
Finding Car Insurance Coverage With Poor Credit
Finding the cheapest auto insurance coverage with poor credit is not impossible. There are many companies out there that will still offer you some of the best car insurance policies with bad credit.
You want to make sure you are not just signing up with a company because you think they are the only ones that will offer you car insurance coverage. It is important to closely analyze auto insurance companies and shop around to find the best one that suits you.
Consider the following when shopping for the cheapest auto insurance policies with bad credit:
Consider insurance coverages
Make sure that you are getting good coverage for the price you are paying. Pay attention to any exclusions on your car insurance policy and make a note of accompanying coverage limits. You need to have enough insurance to cover yourself and any other injured party in the event of an accident. Buying the absolute cheapest policy and being underinsured can land you in a sticky situation.
Research car insurance companies
Not all car insurance companies are created equally. You want to make sure you are signing with a provider that cares about its customers and can be there when you need them most. Do not make an already stressful time even worse by having your policy with a negligent agency. Make sure to look at reviews online and analyze what services the cheapest insurance provider offers.
Be mindful of your budget
Auto insurance for those with bad credit can get pricey, so you want to make sure you can actually afford the coverage. Keep your budget in mind and shop around to try to find the cheapest car insurance quote that is both appealing and affordable. Adjusting your deductible can also help you get the cheapest insurance premiums. More on how to save on car insurance can be found in a later section.
Ways to Improve Your Poor Credit Score
Just because you have bad credit right now does not mean it has to be like that forever. There are a number of ways you can go about improving your credit score, which then, in turn, will help you with your auto insurance premiums.
Listed below are some steps you can take to better your credit score.
Pay bills on time
The biggest factor in your credit score is if you pay your bills and/or loans on time. Regularly missing due dates or just outright not paying your bills will cause your credit score to go down. By getting into the habit of making regular payments, you will be seen by your insurance company as financially responsible, and your credit score will go up.
Establish your credit
You may think your insurance rates will be better if you have no credit, but that’s not the case. Having little to no credit report makes insurance companies wary of you as they have a hard time judging how likely you are to file insurance claims. It would be best to establish credit and maintain a good credit score as opposed to ignoring it completely.
Don’t max out credit cards
How much you owe in relation to your credit limits may be taken into consideration by insurance companies. For this reason, it would be wise of you not to max out your credit cards. Even if you can pay it all back, it will look a bit unsettling to your insurance provider.
Minimize the number of credit cards in use
Only open maybe one or two credit cards at a time. Constantly opening new credit accounts can look a bit suspicious to your insurance provider. Not to mention how annoying it will be to stay on top of every card. Only open credit cards that you need and can maintain.
Stay on top of the credit report
It would be wise to regularly request your free credit report and analyze it fully. If you find any errors, you can report them and try to get your credit in better standing. This will also help you address any blemishes on your credit to your insurance provider.
If you find yourself unable to keep up with bills or have trouble with maintaining credit accounts, it is advised that you seek guidance from a financial expert. Being financially responsible is incredibly important in life, not just when it comes to insurance.
Do your best to monitor your credit report and credit score to get a better understanding of where you stand in the credit world. It will help in the long run.
Car Insurance for Bad Credit and How to Save
Just because your car insurance premiums are high does not mean you cannot take steps to try to get the best rates. There are a number of ways you can go about getting the best rate on your insurance even if you have bad credit.
Outlined below are some common steps anyone can take to get a discount and find the cheapest car insurance policy.
Insurance Policy Discounts
Pretty much all insurance companies offer some sort of discount. They reward drivers who practice safe driving, among other habits. Even if you have bad credit, you can still qualify for a car insurance policy discount. Ask your insurance agent if you are eligible for one or more of the following:
- Good driver discount
- Paid-in-full discount
- Car safety features discounts
- Accident-free discounts
Bundling insurance is one of the best ways to lower your premiums. Bundling means that you have multiple insurance policies with one company. If you already have a homeowners or renters insurance policy, see if that same company offers cheap auto insurance.
By putting all your policies in one place, insurance companies will give you a discount and offer you the best rates.
Believe it or not, how you choose to receive your monthly insurance bills can impact your rates.
Opting to go paperless may save you a few dollars. Insurance providers sometimes offer you a cheap rate if they do not have to mail you your monthly statements.
Just don’t forget your bill is virtual. Make sure you are still on top of paying it.
Reevaluate Your Coverage
Before your policy is up for renewal, take time to actually review your insurance coverage and decide if you want to continue carrying a policy with that insurance provider. This is especially helpful if your credit score has recently improved.
It does not hurt to shop around for cheap quotes and see what other insurance companies may have to offer. This is important to do when your credit score goes up.
You should also regularly reevaluate your insurance policy to make sure you actually need what you are paying for. If some major life events have happened, like moving, you may not need certain types of auto coverage any longer.
But be cautious when doing this. You never want to be underinsured.
Limit Filing Insurance Claims
As annoying as it can be, filing insurance claims increase your rates. Every time you file a claim, your insurance rates increase, depending on the severity of the accident.
Due to this, it may be wise to pick and choose when to actually file insurance claims. Accidentally bumping into a curb or mailbox may not be worth it to file a claim. Damage is probably minimal, and you could pay for it out of pocket.
However, if you were to get T-boned by another vehicle, you would absolutely want to file an insurance claim and use your auto coverage. Limiting the number of claims you file does not decrease your rates; it just helps to keep them at a fixed rate.
Get a Bad Credit Car Insurance Quote Today
Looking for the best auto insurance policy with bad credit? Call Insurance Navy™ today to get a cheap car insurance quote. Make sure you let us know your zip code, your driving history, and information on your cars.
By providing us with all this, we can get a better idea of the coverage you need. You can get a quote either at one of our many locations or online via our website and mobile app.
You can also start your quote over the phone. Get the best cheap car insurance coverage today and drive worry-free tomorrow.