Will Credit Effect One Day Car Insurance rate?
In most cases the answer is yes, the majority of one day car insurance companies use some type of credit to determine your insurance rates.
The statistics show that people with better credit file fewer claims and for that reason, insurance companies can offer them a lower one day car insurance premium. On the contrary, people with less favorable credit statistically file claims more frequently and will pay more for their insurance in most cases.
One day car insurance companies don’t use FICO scores — they use proprietary credit algorithms. Each insurance company has their own algorithm and they keep it closely guarded. Although the algorithms are different, they’re relatively similar.
Important info about your one day car insurance policy and credit
If you feel that your credit has improved, you have the right to notify your one day car insurance company and request to have the credit algorithm updated. The NYS Insurance Department permits one day car insurance companies to obtain credit information once every 3 years at the request of the customer. If the customer’s credit improves, their rate will be adjusted downward but if the customer’s credit worsens, their rate will not be negatively impacted.
The insurance company cannot obtain information about a customers credit without permission. Frequently I see people switching one day car insurance companies to save money when in reality they could have asked their one day car insurance company to obtain updated credit information and to lower their insurance rate. This would allow them to stay with the same insurance company. Most people don’t realize this is an option.
More info about one day car insurance?
If you’d like more information regarding how your credit is affecting your one day car insurance rates, you can review our other articles within this blog or check with our sponsors.
