The Real Key To Low Home and Car Insurance Premiums
· by Matt Fox · posted March 4, 2008
· filed under Auto, Homeowner, Insurance Agents, Personal Insurance category.
Everyone wants the lowest price they can get on their home, auto and other personal insurance. I don’t feel out of line making that bold statement.
It’s funny how almost everyone we talk with starts going down a list of things that may or may not qualify for discount. They’ll say they qualify for various discounts because they have OnStar, Low Jack, taken driving classes, multiple cars, home and auto/multiple policies, home alarms, a pit bull to eat any burglars, the list goes on and on. While some of those do qualify for discounts, and every insurance company has its own set of discounts, those generally make a small impact on price.
There are two keys that I’ve found critical to the best rates: your credit rating and an independent agent that can shop for you.
Almost every insurance company now uses credit as some form of rating for your personal home and auto insurance. In fact, many have been using it for over 15 years.
Not all insurance companies call it credit; some call it financial stability, financial score, tier rate or something else. And, for most companies, you won’t see it listed as a discount. You won’t even know how it relates to the price because it’s built into the rating tiers.
How much of a price break will excellent credit give you? Since every company is different in how they use credit, it can vary drastically. However, we’ve seen prices for top credit tier being less than half of the worst credit tier.
So, why is credit used? Here’s what I’ve been told:
-
“There is a direct statistical relationship between credit rating/financial stability and losses made.”
Is this true? I don’t analyze the statistics. I don’t have a clue. However, I have seen this to be somewhat true in our agency and with claims of our clients. All I can say is improve your credit and drastically lower rates.
I’ll go into how an independent agent can shop for you and find you the best rates in another post soon.
Comments
Got something to say?