Drivers often have many questions when searching for and selecting car insurance. Because coverage needs and policies can be complex, drivers often ask their agents only a few of the questions when shopping for insurance. Unfortunately, many of their questions go unanswered or come up at a later, less convenient time, when their agent isn’t around. That is why today, we are addressing a couple of the less frequently asked questions that are often overlooked.
Does an Online Car Insurance Quote Affect My Credit Score?
Online car insurance quotes often ask users to put sensitive information into their website, such as social security numbers. Many drivers are leery of doing so, but they submit them anyway in an effort to get the most accurate quote.
Fortunately, shopping for car insurance will not harm your credit score, as the credit review is a ‘soft’ hit against your credit rather than a ‘hard’ hit. However, drivers may feel more comfortable working directly with an independent insurance agent to get multiple quotes than submitting sensitive information on the Internet.
What is an Insurance Score?
An insurance score is a measure of your risk to the insurance company and your likelihood of filing a claim. Here in Minnesota, insurance companies are allowed to use data in your credit report, as well as other driver and consumer data, to determine how much to charge you for insurance. These scores often use some of the data in your credit report to determine how likely you are to manage your exposure to risk. You can improve your insurance score by paying your bills on time and managing your existing credit lines responsibly.
Are insurance companies allowed to discriminate?
It may seem like discrimination, since insurers can charge more for car insurance based on factors like a driver’s age or gender. However, insurance companies use actuarial tables based on statistical analysis to determine who is most at-risk of being in a car accident or exhibiting dangerous driving behaviors.
For example, men under age 25 are more likely to die in a car accident than any other driver group. Furthermore, single men – regardless of age – are more likely to die in an accident than married men.
So while it may feel like discrimination, rates are all based off of statistics relating to past losses.
When does my child have to get his or her own insurance policy?
When your teen gets a license, you will probably choose to put him or her on your family car insurance policy. Though rates tend to go up, the lower risk of other drivers within your household can help make premiums more affordable than an individual policy would be for your teen.
As time goes on, the exposure to increased risk will diminish, and so will the premiums, so long as your young driver does not get any citations or cause any accidents along the way.
In the meantime, young drivers can continue to benefit from mom and dad’s policy throughout high school, into college, and beyond, so long as they are part of the same ‘household’. Once your child moves out on his own and has graduated from college, it is time to get a personal car insurance policy.
