Besides your driving history and type of vehicle, your credit score can influence what you pay for auto insurance. Here are some answers to common questions about your auto insurance premiums and credit scores.
How does Nationwide come up with car insurance premiums?
Some of the rating factors that influence your auto insurance premiums include:
Age or driving experience
How your vehicle is used
Driving and claims history
Geographic location
Credit history
Make and model of your vehicle(s)
Make and model not only influences your auto insurance premiums, it can also determine what type of car insurance you need. For example, classic car insurance is specifically designed for the unique needs of those who appreciate the classics.
How does credit affect car insurance prices?
Nationwide uses a credit-based insurance score when determining premiums. Studies show that using this score helps us better predict insurance losses. In fact, 92% of all insurers now consider credit when calculating auto insurance premiums. Learn how you can save on costs by taking advantage of affordable car insurance with discounts.
How does Nationwide determine this credit-based auto insurance score?
For the credit portion of your insurance score, these are the key factors:
Payment history, including delinquencies or late payments
Length of credit history
Types of credit, such as credit cards and loans
When determining your car insurance credit score, sex, marital status, age, ethnicity, address and income are never considered.
How can my credit insurance score benefit me?
A credit-based insurance score allows insurers to quote the fairest, most appropriate rate for every customer. About half of our existing customers pay a lower premium based on their credit score.
Does a good credit score result in a good car insurance score?
It’s an apples-to-oranges comparison, so not really. Insurers don’t look at credit the same way a financial institution does. Insurers consider only information that pertains to potential losses.
How does Nationwide protect customer information?
Nationwide has many safeguards in place to ensure the confidential and responsible handling of your personal information.
The only employees who see your information are those who need it for legitimate business purposes – to provide products or services to you.
No Nationwide associate will ever view your actual credit report
How can I improve my credit score?
Visit the Federal Trade Commission for more consumer credit information and resources that explain how to improve your credit score.
What is an extraordinary life circ*mstance?
At Nationwide we value our customers. We have an extraordinary life circ*mstance process that applies in all states. If your credit information has been directly influenced by one of the following events, you may qualify for reconsideration of your premium.
Any catastrophic event declared by the federal or a state government1
Total or other loss that makes your home uninhabitable1
Divorce or dissolution of marriage
Death of a spouse, child or parent
Serious illness or injury, either to you or to an immediate family member
Temporary loss of employment for three months or more, if such loss is due to involuntary unemployment
Military deployment overseas
Identity theft
If you have any questions about credit and how it can affect your insurance rates, feel free to contact your Nationwide agent any time.
Nationwide uses a credit-based insurance score when determining premiums. Studies show that using this score helps us better predict insurance losses. In fact, 92% of all insurers now consider credit when calculating auto insurance premiums.
Four states — California, Hawaii, Massachusetts and Michigan — have banned insurance companies from using credit scores to price or deny insurance policies. Three more states — Maryland, Oregon and Utah — have restricted credit scores being used as a factor to deny or cancel policies.
Most insurance companies using credit information will include it as a factor in determining your rate. For example, someone with a relatively high credit score may pay a lower premium than someone with a relatively low credit score.
Most U.S. insurance companies use credit-based insurance scores along with your driving history, claims history and many other factors to establish eligibility for payment plans and to help determine insurance rates.
Car insurance companies use credit scores as a factor in determining premiums because they believe that there is a correlation between a person's credit score and their likelihood of filing a claim.
State requirements. Your state of residence is one of the factors that affect car insurance rates the most, as premiums for state-minimum coverage vary by up to 318%. ...
With above 800 being excellent and below 579 being poor. However, it's important to note that each insurer has its own criteria for evaluating credit scores and their impact on insurance rates.
Insurance companies in California don't use credit-based scores or your credit history for underwriting or rating auto policies, or setting rates for homeowners insurance. As a result, your credit won't impact your ability to get or renew a policy, or how much you pay in premiums.
Your credit score plays a significant role in determining your interest rate, but other factors such as the lender, amount borrowed, length of the loan and economic conditions also play a role.
Some factors that may affect your auto insurance premiums are your car, your driving habits, demographic factors and the coverages, limits and deductibles you choose. These factors may include things such as your age and your driving record.
On the pro side, it can be a reflection of the responsibility and stability of an individual, which are factors correlated with low-risk behaviors and thus can lead to lower premiums. However, the con is that it may penalize those with low credit scores due to reasons not connected with their insurability.
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