Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that exis...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Apr 22, 2020

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Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

Things to Remember...

  • The best and most affordable auto insurance does not come from the same company for everyone
  • Everyone has different circumstances, personalities, and factors that impact what insurance company they need
  • Know what will have an impact on your car insurance rates, such as credit score and driving history

All different types of people are driving on the roads, and they all have different circumstances.

The auto insurance companies are also different, and they are capable of insuring one group for one price and another group for a higher price.

Sometimes, companies cannot insure certain drivers at all. A bad driver auto insurance company may be able to specialize in insuring these people.

You can always find an affordable policy with our FREE auto insurance comparison tool! Enter your ZIP code to see rates available to you from different companies!

How Your Credit Score Factors Into Your Rates

People do not always understand the link between auto insurance and your credit score.

The fact is that some auto insurance companies like to know what an applicant’s credit score is so the agents can determine if the applicant is a reliable person or not.

The most reliable and responsible people pay their bills on time, and they do not have several negative marks on their reports. Some of these things are:

  • Bankruptcies
  • Foreclosures
  • Short Sales
  • Late Payments
  • Non-Payments
  • Debt Settlement

An applicant who does not have any of the negative marks listed above has a relatively high credit score.

Statistically, the insurance agents are aware that people with high credit scores cause the least accidents.

Auto insurance companies check my credit rating for agents to know who is the most likely to file a claim.

Auto insurance companies cannot offer everyone the same coverage for the same price based on credit scores because the person who is more likely to file a claim will cost the auto insurance company the most money.

The ones with high credit scores who will not necessarily file a claim will not cost the company as much money, and this causes them to be entitled to lower rates for better coverage.

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How Driving Records Help to Set Rates

Some people have several points on their driving records, and others do not have any at all. People with the most points on their records are considered to be the most dangerous drivers.

On the other hand, a person who has never received one point is a safe driver who is not very likely to need to file a claim.

Some of the reasons that people receive points on their records are because they have:

  • Received DUIs
  • Multiple tickets for moving violations
  • Suspended or revoked licenses

Those who have driven after drinking alcohol dramatically increased their chances of being involved in a car collision.

Similarly, people who drive above the speed limit and perform dangerous actions in their vehicles such as driving too closely behind a vehicle are also close to being the cause of an accident.

When people apply for a new auto insurance policy, the insurance agents will be just as interested in these people’s driving records as they will be in their credit reports.

The driving records allow them a glimpse into the future as to who is going to be the cause of an accident.

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Non-Standard Policies Are in Limited Supply

Some auto insurance companies do not offer nonstandard auto insurance policies, so they cannot offer an auto insurance policy to the highest risks.

Other auto insurance companies that do have high-risk policies will charge very high rates, and the coverage will tend to be limited to liability only.

Other auto insurance companies do have policies for the high risks, and they advertise as being less expensive than most other companies.

This will help people who have bad driving records obtain necessary liability coverage.

The Advantage of Being a Good Driver

Those who have good driving records are not restricted to any one company.

They will receive the best rates from any of the types of companies described above, and they can even qualify for a good driver’s discount.

They will also not be restricted in the type of coverage they can purchase.

For example, along with their liability coverage, they can also purchase:

  • Collision
  • Comprehensive
  • Rental Reimbursement
  • Medical Payments
  • Uninsured/Underinsured Motorist Coverage
  • Towing

Free Auto Insurance Comparison

Enter your ZIP code below to view companies that have cheap auto insurance rates.

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Discounts for Lowering Rates

Because different ages make people more or less likely to cause an accident that will result in claims for the liability coverage, auto insurance companies charge people different rates.

If people need to lower their rates, they can find auto insurance companies that can do this for them with discounts.

Some advantageous discounts difficult age groups are entitled to are:

  • Good Student Discount
  • Driver’s Training Discount
  • Defensive Driving Course Discount
  • Retirement Discount

Luckily, all auto insurance companies are not required to follow the same pattern.

If one auto insurance company wants to insure more high risks than another, it can offer these people auto insurance for a more reasonable price than the competition.

People who are hard to insure can find these companies by entering their ZIP codes into our FREE auto insurance comparison feature!

References:

  1. http://www.consumerreports.org/cro/car-insurance/credit-scores-affect-auto-insurance-rates/index.htm
  2. https://www.allstate.com/tools-and-resources/car-insurance/speeding-ticket-and-car-insurance.aspx
  3. http://www.iii.org/articles/what-does-my-credit-rating-have-to-do-with-purchasing-insurance.html
  4. https://www.thebalance.com/how-to-get-a-good-driver-discount-527533
  5. https://www.statefarm.com/insurance/auto/coverage-options/liability-coverage