Car Insurance Co and credit checks?

Discussion in 'Credit Talk' started by mother2, Jun 27, 2001.

  1. mother2

    mother2 Well-Known Member

    You mean to tell me that if you have bad credit, you can be denied for car insurance????

    I heard this from an Agent that told me that all of the "premium or standard" companies......Allstate, Nationwide, etc.... will run a credit check and if you don't have positive credit then you will have to go with a more "non-standard" Geico and Progressive. I thought Progressive was a premium company.

    Help guys.
  2. Hope

    Hope Well-Known Member

    That insurance agent is blowing smoke.

    GEICO only accepts the creme de la creme of applicants and Progressive is neither premium, nor sub-premium.

    Also, while nearly all homeowner's insurance policies premiums are subject to a credit check, few auto insurance companies use this tactic (although some do, but it's not that common).

    Tell him/her to go back to school.
  3. mother2

    mother2 Well-Known Member

    Thanks Hope. I was starting to wonder if the Agent was just trying to get me to get their insurance.

    One more can one tell if the company is good or bad? There are soooo many out here....especially in GA
  4. Shantel

    Shantel Well-Known Member

    I beg to differ Hope. If you (not you but the originally poster) does a search on insurance, you'll find a thread where we had a long discussion about auto insurance and credit checks.

    Nowadays, it's the NORM! I called Geico for a QUOTE and they checked my credit! There are few companies today that will NOT pull a credit report. It that thread, people posted insurers who don't pull a credit report.

    I don't know if Geico is "alternate" or "prime" insurance, but I know they pull your credit report. On the other hand, most companies will not pull your credit for homeowners insurance. At least AllState didn't when I got mine.
  5. mother2

    mother2 Well-Known Member do I find this thread

    My car insurance policy is almost up and I do want a good company. NO MORE high-risk companies.
  6. Laray

    Laray Well-Known Member

    Re: do I find this thread

    I know Geico and progressive run credit checks just to give quotes, i have a friend that couldnt get insurance at any of the major insurance companies and had to find like a mom and pop insurance company to get insurance from.
  7. Shantel

    Shantel Well-Known Member

    Re: do I find this thread a search on this board. Type in "insurance" and start scrolling. You should find it. If it hasn't been moved. I'll try to get a link for you.
  8. sam

    sam Well-Known Member

    Re: do I find this thread

    In most states, car insurance rates are based upon credit!!! Only in a few states like GA can they not base your rates on credit.

    secondly, the option to extend payments to you, is based on good credit. Otherwise you'll have the pay the policy in full (6/12 months) at one time.

    Progressive will do this, give you a good rate, pull your credit, then bam. $2400 due
  9. breeze

    breeze Well-Known Member

    Re: do I find this thread

    Liberty Mutual and State Farm do not check credit. Or they didn't last I heard. Things can always change. SF says they are committed to NOT using CR's to determine risk for auto insurance.

    some here claim AmEx does not check credit - I don't know for sure. Ask the agent point-blank, before you authorize a quote.

    If you ask for a quote without checking on this, you may get a credit inquiry.

    breeze (the agent)
  10. Shantel

    Shantel Well-Known Member

    Re: do I find this thread

    This thread contains other stuff but there's some info there about insurance companies and credit.

    Hope this helps!
  11. mother2

    mother2 Well-Known Member

    Sam you are right

    I just called Allstate and they told me that they do pull credit reports and depending on the history will determine whether I will have to pay the amount in full or 16% of the quote.

    Companies didn't do this in the past but now they are very stern. I guess it's to rule out "risky people". If you don't pay the monthly premiums then they'll drop you, your insurance will lapse. I guess they don't want to go through all of that.

    People who have been isured up to now with a "premium company" don't have to worry about credit reports. It's those of us who are trying to get there that have to worry.
  12. Hope

    Hope Well-Known Member

    That'st because they don't need to. Remember that by the time you're purchasing homeowners insurance for a new home, you've also already begun or nearly completed the mortgage app process. In this case, the lender often shares the CR they pulled with the insurance company. It's simply easier because it's the lender that the insurance company has to provide the proof of insurance (sometimes in the form of a binder).

    So they DO see your credit report; if if they don't pull it themselves.

    The situation varies when there's no lender involved (in the case of an all-cash sale); or sometimes when the policy is a reissuance triggered by a refinance.

    Hope that clears up a few things.
  13. Terry

    Terry Well-Known Member

    I have my car insurance through Geico Direct. I purchased the policy when they started underwriting in PA about 6 years ago. No other insurance company can match my rates! They pissed me off a few times and I shopped around. Every other insurance company told me to stay with them because they couldn't match my rate. I have a late model Nissan Maxima with full coverage AND full tort for 497.00 per year!

    I wanted my renters policy with them but they wanted to run a credit check and I declined. I went with State Farm. When I purchased the policy State Farm couldn't touch my car insurance rate. So I stayed with Geico.
  14. mother2

    mother2 Well-Known Member

    So I guess it really doesn't matter what company you get your insurance long as you're insured.
  15. NanaC

    NanaC Well-Known Member

    GEICO (on my homeowners') checked, saw I was in their computer for a past policy and ok'd me..if I hadn't been, they would have run a check.

    Allstate was horrible..they'll give you credit but hike up your rates if not what they think it should be! Note: Hubby's 645 was not high enough for them not to try to give him high risk rates.
  16. dlo64

    dlo64 Well-Known Member

    Geico and Progressive pull reports, but honestly, my Farmers Insurance policy is lower than anything they quoted me. I think even State Farm was lower than Geico.

    I also agree, I don't think State Farm pulls credit to open a policy.

    I think this goes back to why can a bank hold a bad history against you for opening a savings account and why does an insurance company hold a bad report against you. I guess they think you might commit fraud and rip them off to pay you bills! LOL

    These practices make me so mad!
  17. breeze

    breeze Well-Known Member

    Fraud is the reason they give, but there is no real correlation between credit history and insurance fraud. That's SF's position, and they are correct.

    It is an excuse to charge you higher premiums, IMHO, and he best way to fight it is to place your business with companies that do not check your credit.

  18. KristyW

    KristyW Well-Known Member

    It's my opinion that all auto insurance companies use your credit report to create a policy for you. At the credit scoring conference at the FTC in July 1999, it was freely admitted that inquiries on your credit report by auto insurance companies were a big problem. To the best of my knowledge, this is standard practise in the business.
  19. mj

    mj Well-Known Member

    Metropolitan does a hard inquiry at application -- then does soft inquiries every year for renewal.

    Here in MA - rates are set by the state and there's no deviation (except for driving record, which the state maintains, or for state-mandated discounts like airbags, antitheft... and if you are part of a state-approved "group") so your credit cannot play a role in the rates (or if you are accepted- they have to take all applicants). Welcome to the People's Republic of Massachusetts : )

    I digress ... that doesn't stop Met from pulling CRs, even though they DON'T need them and CANNOT use them. When I asked a rep. about that - they said it's standard practice.

    Now, let's see, most of the big insurance companies are now setting up bank subsidiaries (State Farm Bank, fsb; Metropolitan Bank; Prudential Bank...) and the new FCRA laws allow them to share ALL info unless you opt out ....

    Nice way to prescreen and cross-market, I'd say.
  20. breeze

    breeze Well-Known Member

    That's the idea, I think, LOL.

    You in the insurance biz, mj? You sound like it.


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