If you have a low credit score or bad credit, you should know that no credit check car insurance may be an option for you. While car insurance rates are calculated based on a number of factors, your credit score can result in companies charging you very high premiums or not wanting to insure you at all. And although most insurance companies in almost every state will check your credit and use the information to determine their risk in insuring you, there are some insurers who will provide an insurance quote without a credit check.
If you’re looking for non-credit-based coverage and prices, here are some car insurance companies that don’t check credit. If you know where and how to look for it, you can get find cheap car insurance for bad credit.
Auto Insurance Companies That Don’t Check Credit
To be upfront, there are few options for drivers who want no credit check auto insurance. In fact, 90% of all the auto insurance companies in the United States will check your credit when you apply for a policy. Only three states – California, Hawaii, and Massachusetts – have banned companies from checking your credit score when determining rates.
If you live in one of these states, you can rest assured that you can get a car insurance quote without a credit check from any company you want. This means that State Farm, Allstate, Progressive, GEICO, Liberty Mutual, Farmers, and Nationwide won’t check your credit history for a quote.
Otherwise, only 10% of the companies in the other 47 states forego your credit history in favor of other risk-determining factors. However, in order to mitigate the risk involved in skipping the credit check, these companies will typically charge higher rates.
For instance, if you want no credit check auto insurance in Michigan, Florida, Texas, New York, Illinois, Pennsylvania or Ohio, you’ll have to get coverage from a company who prefers to insure high-risk drivers.
Though there is no comprehensive list of car insurance companies that don’t check credit, you can easily find out which insurers will provide you with the lowest rates by getting instant quotes online. This makes it easy for you to compare quotes from multiple companies at once without having to submit your information numerous times.
Just look at your results, find the ones that have the cheapest rates, and start comparing policies, coverage options, and service to learn more.
Why Car Insurance Companies Use Your Credit Score
Despite the fact that most insurers check credit when determining premiums, many consumers are still shocked to find out that their credit scores are so very important when it comes to buying insurance. There is one main reason why very few companies don’t use credit scores.
Statistically, the lower your credit score, the higher the likelihood that you will file a claim. And the more insurance claims you file, the more money the insurance company pays out on your behalf, and this is what makes you a risk. Even the Federal Trade Commission published a study in 2007 showing how people with bad credit typically file more insurance claims than drivers with good credit.
It is also important to think about your Auto Insurance Score, which is usually just referred to as your insurance credit score. This is a completely separate number from your FICO score. However, companies use your credit history and FICO score as part of the algorithm that determines this figure.
Other factors that affect insurance rates include your personal information (e.g. age, gender, single or married), past driving history, insurance history, the state you live in, the type of car you drive, the amount of coverage you want, etc.
How To Get Cheap Car Insurance with Bad Credit
If you’re looking to get cheap car insurance with no credit check, the truth is that companies that don’t use credit scores to quote rates generally cost more. The only time it makes sense to go with a companies that doesn’t pull a credit report is when a traditional insurer like GEICO, Allstate or Progressive won’t even insure you at all.
Fortunately, there are many things you can do to lower your rates and get cheap car insurance with bad credit.
Improve Your Credit Score
For starters, you should work on improving your credit score and fixing your history. You can obtain a free copy of your credit report every year from the 3 major bureaus – Experian, TransUnion, and Equifax. Once you have your credit history, check your report carefully for incorrect information. If you find inaccurate information, dispute it immediately. Aside from this, work on paying off old debts and making payments on-time.
Safe Drivers Get Cheap Rates
Aside from working on your credit, one of the best ways to save money on insurance is to drive safely and defensively. The longer you go without an accident or ticket, the less of a risk you become to insurers. Remember that non-moving violations and parking tickets don’t count against your driving history. This means that your auto insurance score may go up enough to save you money with lower premiums, even if you technically still have bad credit.
Avoid Late Insurance Payments or Coverage Lapses
Always avoid making late payments or incurring lapses in coverage. Having proof of insurance and maintaining coverage can affect your insurance score. If you’ve had frequent lapses, or if you’ve missed several payments (or even failed to pay them on time because you can’t afford the rates), this is a significant red flag for providers. Since auto insurance is mandatory in most states, always budget enough money to pay for coverage.
To get insurance quotes without a credit check, enter your zip code, pick a company, and compare policies.