Do you have bad credit or no credit at all? Well, be prepared to pay more when insuring your car or home or anything else that you’d like to insure. Insurance companies are charging more if you don’t have credit or if your credit score is poor.
A recent report by Wallet Hub shows that there are big differences in what insurance companies are charging Arizonians for the same coverage. And credit worthiness now plays a big role in what premiums you end up paying.
For example, the company found that State Farm charges $72.03 for a 37-year old single male who owns a 2009 Honda Accord LX four-door sedan which he drives for approximately 16,000 miles a year. That should be enough to buy the 50/100/50 liability coverage where $50,000 goes towards injuries caused to a single person, $100,000 goes towards injuries caused to more than one person, and $50,000 is set aside for damages caused to property of the aggrieved. You will also be covered should you get involved in a collision with an underinsured or uninsured motorist. Expect collision and comprehensive coverage with a $1,000 deductable.
However, Wallet Hub found that the same insurance company charged someone with the same needs but with no credit history up to $34.33 more. So, if you owned a similar 2009 Honda Accord LX and had the same insurance needs but had no credit history, you would end up paying $106.36 per year in premiums.
State Farm is a major insurance provider in Arizona with recent statistics from the Department of Insurance showing that it controls more than 15% of the $1.6 billion collected in premiums within the state for private passenger vehicle liability insurance.
However, it’s not just State Farm. The use of credit history when calculating premiums is used by almost all other insurance providers in the state. All State, another major player in the industry in Arizona asks for $121 a month for the same policy for people with good credit compared to $194 for people with no credit history. And another insurance provider, Farmers, is charging almost twice as much if you don’t have a credit history with those with good credit paying $95.90 while those with no credit histories paying $201.33.
It’s definitely a huge burden on people with bad or no credit history; which is probably one reason every merchant needs a bad credit merchant account. These accounts somehow protect you in case of bad credit.