The Insurance Information Institute has found that drivers with lower credit scores are more likely than those with higher scores to file a claim. Your credit score can have an impact on how much you pay for insurance, whether you live in California or Massachusetts.
Your credit score can have an impact on your insurance premium. However, it doesn’t mean that you shouldn’t start looking for car insurance for people with bad credit in Connecticut. These top companies are also likely to be the best for poor credit drivers.
Car insurance with poor credit is the best in Connecticut
Connecticut drivers with poor credit pay $1,293 more per year for car insurance than those with good credit ($1,674).
A vast majority of insurance companies use credit-based insurance scores to calculate a customer’s premium. This score is obtained from LexisNexis or FICO. These reports identify customers as:
- Poor
- Average
- Good
- Excellent
These may seem familiar to you. These data are the same as your TransUnion, Experian, or Equifax credit reports (aka The Big Three). These reports contain information such as your on-time payments and debt amounts. This data is used to determine how likely you are that you will be in an accident and to file large claims.
A credit-based insurance report won’t prevent you from getting a loan or credit line, but it will increase the cost of your premium. You will not be covered if you have too many DUIs or at-fault injuries.
What does Connecticut’s credit score have to do with my car insurance rates?
It is unlikely that we will ever know why low credit scores are associated with higher risks. However, the correlation between these data points has been established time and again. Recent studies have shown that the FTC as well as the Texas Department of Insurance both confirmed the relationship. MetLife’s study reveals that low credit drivers file 50% more claims than those with good credit.
You should work hard to improve your credit score if you have poor credit. This will not only help you with your interest rates but also lower your insurance premiums. Insurance companies may require you to wait longer to have your information reviewed by them because they write policies that last 6-12 months. Many drivers choose to change providers. The new provider will view your most recent credit-based insurance score, and will offer you a premium that is reflected in the new data.
What are other factors that impact Connecticut’s auto insurance rates?
Your credit score and other factors can have an impact on how much you pay for auto insurance. These are the main factors that affect the cost of your auto insurance.
- Locality: Some zip codes are more likely to be flooded with claims than others. This could be due to theft, natural disasters, or accidents. No matter the reason, if you live in that area, it is more likely that you will file a claim. Your premium would be lower if you moved. Drivers who move from Tampa to Orlando save on average $450 per year.
- Vehicle Type: A newer car is more expensive to insure as it is more costly to repair and replace. You can save money by choosing a mid-range car that also has a high safety rating. Honda Odysseys, for example, cost on average $1,454 per year to insure. To fully insure a BMW 330i, it costs approximately $2,225
- Driving record: A single DUI arrest is enough to get an 86% increase in your premium. Your premium will be increased by significant margins due to speeding tickets and at-fault accidents.
How to get Connecticut car insurance at a low price with bad credit
A Connecticut driver who is looking for affordable car insurance can do many things to get lower rates. You can improve your credit score by doing these things:
- Compare: It is important to shop around when searching for Connecticut bad credit car insurance. Although every company will refer to your credit score when you apply, every company weighs it differently. You can receive two different premiums from the same company offering the exact same policy.
- Compare discounts: Different companies may offer different premiums for the exact same policy. However, they can offer different savings for the same discount. It is important to compare discounts between insurance providers if you want to save money. However, it is equally important to look for providers that offer discounts that you can use, and who will provide significant savings. Talking to an agent may be necessary in order to get the best deal on each discount.
- Your deductible can be increased: This will help you save money each year. You will get less payout after an accident. It is a good idea to look at your budget.
- Driving an older vehicle can help you get car insurance in Connecticut for those with poor credit. Car insurance will cost you more if you drive the most modern and brightest vehicle. Why? It costs more to fix and replace a new car than it does to buy one.
- Keep driving safely. Your driving record is an important factor in determining your insurance premium. You will be less likely get a ticket if you obey all traffic laws, including the speed limit and stopping at stop signs. Your insurance company will see that you are a safe driver over time. You can get an additional incentive by choosing insurance companies that offer a usage-based discount. A usage-based discount analyzes your driving habits using a smartphone app. If the insurance company likes what it sees, it may offer you a discount.
Questions frequently asked
When I apply for insurance, will I be subject to a credit check?
It will not affect your credit score. If you’re looking to borrow money or get a line of credit from a lender, a credit check will only affect your credit score. An insurance company will run a soft credit check, not a hard credit one.
What company offers insurance for drivers with bad credit?
They all. While bad credit won’t stop you from getting a policy it can increase the price of your premium. Compare. Different companies weigh the importance of credit in different ways.
