How Does My Bad Credit Affect My Auto Insurance?

   

 

    Credit And Risk

• Insurers claim that studies show a correlation between your history of credit use and your risk factors as a driver. Therefore they say that if they access your credit report and build up what's known as an insurance score from the information, their underwriting process can be more thorough.

    Insurance Score

• The insurance company does not simply pull your credit score. It uses the information in your credit report to generate its own scoring. This is usually done by a proprietary system, and auto insurance companies will not let you know what your insurance score is, or why you scored well or badly.

    Other Risk Factors

• Your credit history is just one among many factors that will go toward deciding your insurance premium. Where you live, what kind of vehicle you drive, your age, gender and driving history are all very important --- you may be able to make up for your bad credit in other areas.

    Extent

• According to the Insurance Information Institute, drivers with poor credit histories make claims on auto insurance 40 percent more frequently than drivers with good credit. Compared with another driver whose profile and risk factors are identical to yours, but who has perfect credit, you may pay between 20 percent and 50 percent more for insurance.

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Who is Responsible for Passengers Injured in a Auto Accident?

What would happen if you were driving a car, were involved in an accident, and there were passenger injuries as a result of the accident? Would insurance cover their injuries? If so, whose insurance would cover it? 

If you are a passenger and are injured as the result of an accident, you can file a claim with either person's auto insurance company. Since you were not driving, it would not effect your insurance, and since you were not the cause of the accident, it would not be your responsibility to cover your injuries. 

If your driver was found to be at fault, they would be liable for your injuries and you would have to file a claim with their insurance company. Their company would have to cover all of your medical bills as well as compensation for pain and suffering. 

If the other driver was found at fault, they would be responsible for all injuries and damages to you. This would fall under their liability coverage, which covers damages and injuries to others as a result of their actions. If they are uninsured or do not have enough auto insurance to cover all the damages, they are still liable, but you may have to take them to court in order to collect. More information on uninsured driver's can be found at cheap auto insurance quotes online.

So in the end, it comes down to who is at fault, as they will be responsible for covering all injuries and damages, including all passengers. You can see how a simple accident can balloon up a large bill, if there is a full car fo injuries!

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How to Get Insurance If I Don't Own a Vehicle

Most people assume that you need a car in order to maintain an auto insurance policy, but this is not true. A non-owner's policy is auto insurance for people who don't own cars, but who drive on a regular or even an occasional basis. 

This type of auto insurance will provide coverage if you are in an accident while driving a friend's car or a rental car. Even if your friend or the rental company has insurance on the car you are driving, a non-owner's policy can provide additional coverage after the primary insurance pays out maximum benefits.

Instructions

1. If you already have one form of insurance---perhaps renters, homeowner's, or life---contact your insurance agent and request a cheap auto insurance quote on a non-owner's auto insurance policy. Most insurance companies offer a discount if you hold multiple types of policies with them, so this is the best place to start.

2. Calculate the amount of coverage that you need, and figure out how much you can afford to spend. The amount of coverage that you'll need is dependent on factors such as your net worth and the cars that you'll drive.

3. Use an auto insurance quotes comparison site to find the best non-owner's policy that meets your needs. Since this car insurance will only cover automobiles you do not own, you only need "liability" insurance. 

Tips & Warnings

1. Non-owner's auto insurance policy premiums usually cost half as much as a normal auto insurance policy. Keep this in mind when comparing price quotes.

2. Some policies offer small discounts for pre-paying six months or one year in advance.

3. If you do purchase a car in the future, you will be penalized with a higher premium if you have not had continuous auto insurance coverage for the previous six months. A non-owner's policy helps you avoid this penalty.

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