Will My Credit Score Hurt My Great Bend, Kansas Home Insurance or Car Insurance Rate?
We all want the best insurance rate and coverage available. The question is, how do carriers determine the premium? There are a few obvious factors, such as the characteristics and location of the home or the type of car you own, but there are a lot of variables you may not think about.
In Kansas, over the last several years, all preferred insurance carriers have implemented credit-based insurance scoring. The credit-based scoring supplements the overall insurance score. Controversial? Absolutely! But it is the reality we have to work through.
We don’t pretend to know all the ins and outs of what goes on behind the rating curtain. What we do know is credit does have an impact on premium and we know how to navigate through our network of carriers to find a solution that is right for you.
So, why would a carrier care about credit score?
Blame it on the actuaries. Using vast amounts of data to figure out who is riskier to insure, they have determined that people with higher credit scores are less likely to file claims, file claims less frequently, and the claim amounts will be smaller. Actuarial data trends also suggest that the majority of claims are filed by insureds with lower credit.
So why do actuaries think credit should impact my insurance? There are a couple of reasons. Carelessness and fraud. If someone is careless paying their bills, they have a higher chance of being careless with their home or car, which results in more claims.
Actuarial data also shows people with lower credit are more likely to commit insurance fraud.
Keep in mind insurance carriers don’t do a deep dive into your credit like when you get a loan. Insurance credit scoring does not impact your credit rating and is considered a soft touch score.
So, what are the options if my credit isn’t so great?
Work with a trusted local independent insurance agent! Panzer Insurance represents a large network of carriers and we understand which carriers are more credit sensitive than others. We also advocate paying bills on time and trying to increase your credit score.
We work to help everyone no matter the circumstance and will work with you to find the right carrier.
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