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Due to an illness/ disability in our family, despite having health insurance, we still owe thousands in medical bills. Those that would not work with us turned them into collection. They now show on our credit report.

Despite being insured for both our auto insurance and our home insurance for 20+ year with the same insurance company, we got a notice saying our auto insurance had gone up hundreds of dollars per year based on a credit report they obtained. We have never had an accident, ticket, etc. and the amount automatically comes out of our checking each month. Plus, last year, prior to this, they switched us to a preferred group within the company and gave us a discount when we threatened to switch.

How can I find out which insurance companies base your insurance rates on your credit report and or score? Will they tell you outright? This is the first I have ever known that our company did this and was wondering if all of them do it, or do you just know about it when you get a notice like we did?

I get their reasoning but it seems like such a rip off when so many are in our boat- insured but with insurance that is starting to pay less and less and cost more. Plus, they have our checking account and if we were not to pay, they wouldn’t be responsible for us if we had an accident anyway. Seems like a double whammy to me. Can anyone help?
I am in the state of Indiana. Previously they switched us to a preferred group by sending us a letter saying we qualified and the new lower rates. We went in and signed up and the new rates went into effect at renewal..until this latest renewal when they went even higher than our original rate they lowered.
Sorry ED, but American Family is who we have had for all these years and who is doing this credit report thing.

4 Thoughts on Do you know of any auto insurance companies that don’t base your rates on your credit report?
  1. Reply
    car253
    August 25, 2011 at 1:16 am

    Everything depends what state your in. Some states like California do not base rates on credit reports.

    Talk to your agent. Maybe on your auto insurance you can lower your liability limit and higher your deductibles. And, on your homeowners insurance you can take a higher deductible.

    I don’t understand how they just switched you to a preferred group. Are you working with an agent or broker. It would be helpful to know what state your in and what company your dealing with.

    I would also call the Dept of Insurance or Insurance Commissioner in your state for help to make sure you are not being overcharged. Loyalty is great and its great to have and keep a good company and a good agent but sometimes money takes first place.

  2. Reply
    JJ
    August 25, 2011 at 1:35 am

    Most companies are using very complex rating methods that include the credit score as part of the rating. I was not aware that it could cause that much of a shift in the premium though. One thing I do know is that personal line rates (home owners insurance and personal vehicles) are going up right now. That increase combined with your credit issues may be what is causing the higher rates.

    If you have your insurance through a broker, have them look around and rate you with other companies to see what happens. If you are with a captive agent (meaning they only work with one company) ask some friends for good references and find an independent agent to give you some quotes.

    Some states have already passed laws banning the rating technique. There are a number of insurance departments and legislators that are reviewing whether or not they should allow the use of a credit score to be part of an insurance rate. If you want to help out their research, give you senator/representative a call or email and let them know how you feel as well.

  3. Reply
    Insurance Geek-ette
    August 25, 2011 at 2:19 am

    You should check with Travelers. They will, at your request, manually underwrite you, if the score is due to divorce or serious illness.

  4. Reply
    Ed Atun
    August 25, 2011 at 2:55 am

    Allstate or American Family are the most likely to ignore the credit (i don’t work for them)..

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