Credit Scores and Car Insurance Premiums
Michael John Smeriglio III has served as a certified public accountant in Greenwich, Connecticut, for more than 30 years. Dedicated to helping his clients build their financial health, Michael J. Smeriglio III, CPA, provides guidance on issues such as credit scores and their effect on insurance premiums.

To determine a policy holder's rate, insurance companies consider a variety of data, including the driver's annual mileage, the car's primary garaging location, and the age or ages of primary drivers. Most insurance companies also consider a factor known as the credit-based insurance score, a number that incorporates certain elements of the shopper's credit score and report.

The credit-based insurance score does not equate directly to the commonly known FICO credit score, but rather includes approximately 30 specific elements from a credit report, including total debt and payment history. Insurers also choose other factors that they believe relate most closely to a shopper's likelihood of filing a claim, and they prioritize the result highly. In general, single drivers with adequate scores pay an average of $214 more per year than same-state drivers with top scores.

This rate-determining factor is allowable in all states except Massachusetts, Hawaii, and California, which primarily use a shopper's driving record to determine rates.
Credit Scores and Car Insurance Premiums
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Credit Scores and Car Insurance Premiums

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