Your credit score can have an impact on the price of your car insurance, even if you don’t live in California, Hawaii, or Massachusetts. There have been many studies that show people with lower credit scores are more likely than those with good credit to file large claims. Kentucky residents looking to lower their premiums might want to work on their credit and find the best car coverage for themselves and their families.
Kentucky’s best car insurance for people with poor credit
The national average of a good credit driver in Kentucky is $1,674. This means that a Kentucky driver with bad credit pays $2,454 more to insure their car.
Insurance companies often look at your credit report, also known as a credit-based score. This report is obtained from LexisNexis and FICO. These reports identify drivers as:
- Poor
- Average
- Good
- Excellent
These are very similar to what your credit score can be classified as. Because the information used to calculate credit scores is also used to calculate credit-based insurance scores, this is why it is so similar. These data come from the same sources: the Big Three credit bureaus (also known as TransUnion Experian and Equifax).
Information about the following is contained in your credit report:
- History of payments
- Credit history length
- Credit usage
- Types of accounts
- Recent Activity
This activity will determine if you have a high or low credit score in your credit-based insurance score.
What does Kentucky’s credit score have to do with my car insurance rates?
A low credit score could indicate that you are at risk of an accident in the future. It is only a theory. Insurance companies only know that there is a relationship. It isn’t just anecdotal. It has been confirmed by recent studies by both the Texas Department of Insurance, and the FTC. Metlife’s study found that drivers with low credit scores were at greater risk than others.
Most drivers ask themselves this question: If I have a better credit score, when will my premium drop?
The majority of drivers have a 6-month policy. This means that it takes six months for the insurance companies to review their data and issue a new premium. Many drivers choose to switch providers instead, as this can lead to overpaying. The new provider will calculate a premium based on the most current information. This should result in lower monthly costs.
What are other factors that impact auto insurance rates for Kentucky?
The true cost of car insurance depends on many factors, not just a credit score. The following factors can have a significant impact on premiums, even more than a credit score.
- Metro or state: Your premium will be affected by where you live in your state. Insurance companies consider the number of claims that are coming from a specific zip code when calculating premiums. Statistics will show that if there are many claims, you are statistically more likely than others to file large claims yourself. Sometimes moving can be a cost-saving option if it’s practical. Drivers who move to Orlando from Tampa can save on average $450 on their car insurance.
- Type of vehicle: Insuring a high-end car is more expensive than one that is mid-range. Example: Honda Odyssey drivers spend an average $1,454 per year on car insurance. Compare this to BMW 330i driver? $2,225 per year. This is $771 more than the difference.
- Driving record: A DUI is the most serious offense that can be added to your driving record in Kentucky. You can expect to pay at most 100% more for car insurance if you are convicted of DUI. If you are safe and follow all traffic laws, your premium should reflect your driving habits.
How to get Kentucky car insurance at a low price with bad credit
You can improve your credit score by implementing these strategies.
- Poor credit car insurance in Kentucky: It may be possible to drive an older vehicle. Because they are more expensive to fix and replace, new cars can be more expensive to insure. You can save much more by choosing an older vehicle with a high safety rating.
- Increase your deductible: You will pay less per month and more each year for car insurance if you increase your deductible. You will get less payouts after an accident.
- Shopping around: Buying car insurance in Kentucky for bad credit is a matter of shopping around. Every insurance company has its own pricing algorithms when calculating a premium. This means that not all companies penalize bad credit drivers in the same way. You can save money on your car insurance by switching companies.
- Comparison of discounts: Each company will have a different amount of savings. To find out how much, you might need to call an agent and talk to them. Most companies will only provide a range of what you can save online, but not the actual amount. While you’re at it, compare discounts that you can both use now and later.
- Your driving record plays an important role in your premium costs. Your car insurance costs will not be reduced by multiple speeding tickets or at-fault injuries. We recommend that you choose a company offering a usage-based discount on your car insurance to keep you on the right track. The insurance company can monitor your driving habits using your smart-phone. If the insurance company likes what it sees, it will offer you a discount.
Questions frequently asked
When I apply for insurance, will I be subject to a credit check?
Although you will be subject to a credit check, it will not affect your credit score. If you’re looking to get a loan or a line of credit, credit checks will only affect your credit score. This is what makes the difference between hard and soft credit checks.
Is there an insurance company that specializes in drivers with bad credit?
Are you looking for Kentucky bad credit car insurance? Although they don’t exist, you will get a better rate from some companies than others. Each company uses its own pricing algorithm to calculate premiums. This means that some companies place more importance on credit scores than others. To save money on car insurance, shop around.