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You are here: Home / FAQs / Car Insurance and Your Credit Score

Car Insurance and Your Credit Score

February 13, 2019 By Ghabour Law

Why does my credit score affect my auto insurance?

You may have noticed that your insurance company now considers your credit score in evaluating your insurability… Why is that?

Your credit score, which is used to gauge the likelihood you’ll pay back your loans, is also used to gauge your insurance risk. The reason, though it may seem unfair, makes a lot of sense. Insurance companies want to determine, based on your creditworthiness, how likely you are to file a claim.  If your credit score suggests that you’re a responsible consumer, your insurance company will take that into account when determining how much risk they want to take with insuring you.

Remember that car insurance is to protect yourself financially if you’re in a car accident. So, it stands to reason your financial situation will be considered when insurance companies decide how much money they’re willing to risk on you.

Sadly, even if you have “good” credit, you may still end up paying more than someone with “excellent” credit, regardless of your driving history, simply because of your score.  You can have a clean driving record and just a “good” score, and you may still pay more than someone with a moving violation, but an “excellent” credit score.

So pay your bills on time, all the time.

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We are New Jersey lawyers specializing in Personal Injury and Worker’s Compensation cases. Our personal injury team also focuses on auto accidents, commuter accidents, truck, rail, bus and pedestrian accidents. As part of our Workers’ Compensation practice, our team serves those who’ve sustained workplace injuries, or have been injured offsite while performing job duties.

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New Jersey law firm with two convenient locations in Central and North Jersey. Our firm specializes in Personal Injury cases (auto accidents, slips & falls, etc) and Worker’s Compensation cases.

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