Apoor credit history could follow you around in unexpected ways. Your credit score could impact how much you pay for car insurance. Experian is one of three major credit bureaus. “Auto insurance companies can and often do consider your credit history or use credit-based insurance scores before offering you coverage.”
Unfortunately, Texas has not been able to stop carriers from reviewing your credit reports in order to profile you like California, Hawaii, and Massachusetts. You may have a poor payment history, past bankruptcy or foreclosures, and you might need to search for the best Texas car insurance or you could pay a lot more than someone with a higher FICO score.
Credit: Average Texas car insurance cost for full coverage
It is difficult to find cheap car insurance in Texas for those with bad credit. On average, policyholders with poor credit will pay almost twice the average price of car insurance for those with good credit in Texas. You will pay more for past-due bills than interest and late fees. Your car insurance premiums may rise if you are reported to credit bureaus for late payment. How a drop in credit scores can impact your car insurance premiums.
Texas’s best car insurance with poor credit
The average premium for Texas bad credit car insurance is $3,873 compared to $1,674 nationally. The average cost of car insurance in Texas for those with poor credit is $2,200 higher than the national average for good credit drivers.
Each insurance company has its own credit rating system. There are many classifications available, including excellent, poor, average, and poor. They can differ from one insurance company or another. Most of them are compatible with ranges offered by the Big Three credit bureaus Equifax, Experian, and TransUnion. These ranges are:
- Poor: 300-579
- Fair to average: 580-669
- Good: 670-739
- Excellent: 740-799
- Excellent: 800 to 851
What does my credit have to do with my Texas car insurance rates?
The Texas Department of Insurance prohibits insurance companies from refusing to cover you or reducing your coverage solely based upon your credit rating. The state doesn’t prohibit carriers from charging more for car insurance. Based on the risk that you will stop paying for car insurance, or file expensive car insurance claims, they may charge you more.
There are exceptions. There are exceptions. You may be the victim of identity theft, or have suffered hardship following the death of a family member. You will need to send a letter to the carrier to request the exception.
Switching providers can help you avoid the sticker shock that comes with higher-than-normal Texas car insurance. You can shop around for car insurance companies that are more affordable by getting quotes. It is possible to improve your credit score. However, it may take several months before you notice any improvements.
What are other factors that impact Texas’ auto insurance rates?
An insurance company will look at more than just your credit score. Your premiums could be affected by other factors. The True Cost Report from Bankrate explains how certain factors could impact the cost of car insurance. These are the most important:
- Your location: Insurance rates can vary depending on the level of crime in your area and how many claims have been filed.
- Driving record: A DUI, at-fault car accident, or speeding ticket can have a serious impact on your insurance premiums.
- Type of vehicle: Certain cars are more costly to insure like the BMW 330i and the Toyota Prius.
How to get cheap Texas car insurance with bad credit
Some drivers with bad credit ratings can get some relief by lowering their insurance premiums. These include:
- You can shop around: Get quotes from multiple providers to find the best Texas car insurance for your bad credit.
- Carrier discounts: Many car insurance companies offer discounts based on your vehicle’s safety features and your driving record. You can also choose to pay in advance or set-up automatic payments.
- Increase your deductible. A higher deductible can mean a lower payout or an out-of-pocket cost if you file for a claim. However, it could reduce your monthly premiums. Commonly, a higher deductible is $1,000 rather than $250 or $500.
When I apply for insurance, will I be subject to a credit check?
A credit check is not required to get a Texas car insurance quote. The quote process is not affected by a credit check.
If I file for bankruptcy, can my Texas auto insurance company cancel my coverage?
The Texas Department of Insurance states that carriers cannot cancel or refuse coverage based upon your credit rating.
What is the cost of Texas bad credit auto insurance?
Poor credit car insurance in Texas is more costly. The average rate is $3,873 per annum, which is almost two-and-a half times the national average of $1.674 for owners with good credit.