A awful credit history can represent elevated insurance premiums
Extremely few insurance policy holders apprehend that their credit reports are in reality a very essential factor in figuring out their homeowner and automobile insurance premiums.
And the truth is that a straightforward gaffe in your credit report can affect your insurance premium cost adversely.
And its not just the common man, Mississippi Insurance Commissioner Mike Chaney understood that his insurance rates were increasing by roughly 10 percent due to an error on the part of the insurer at Safeco automobile insurance.
Insurance firms stick to a guiding principle which is based on the perception that customers who have a awful credit history tend to file more insurance claims. A lot of consumer advocates make a case with this viewpoint saying that general information should not be taken into account. They think that folks must be handled on a case by case basis and their rates must be flat based on their previous claims and state of the asset.
This claim is all the more vital given that the downturn has resulted in a number of people having a dreadful credit history. This guiding principle of using credit history to determine the tariff increase permits the insurance organizations to increase premium rates without a state approval.
On the other side of the fence, the insurance firms cheerfully defend their strategy by saying that statistics do illustrate the relation between insurance claims and a bad credit history.
And besides the clients who have a good credit history are rewarded for their meticulousness with superior premium rates.
Robert Hartwig, heads the industry’s nonprofit Insurance Information Institute. He notes that a person who is cautious about his or her finances will obviously be someone who is also accountable in other walks of life. That person will be more liable to follow traffic rules and ensure that the car he is driving is well maintained.
He also made a very important observation by saying that a good credit report is not only going to have an effect on whether or not you get a loan, these days it has a much larger influence on ones day-to-day existence.
Robert Hunter, a past Texas insurance commissioner and National Flood Insurance Program administrator, does not think in the relationship between a awful credit history and higher insurance claims.
To date, the federal trade commission has been using data that the insurance companies were willing to make available. However of late, they have started a study that is trying to determine the relationship if any between credit history and insurance claims. He believes that this study will have a a small number of revelations to make. And he hopes that this will diminish the burden on higher insurance premiums on people who are already adversely affected by the financial meltdown.
Of course, the best means to get good car insurance rates is to evaluate car insurance rates at insuriffic.com.
![[Valid RSS feed]](http://www.look4articles.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites
![[Valid RSS feed]](http://www.look4articles.com/images/rss.jpg "XML Feed For RSS")