3 Factors that Completely Change your Car Insurance Rates
When you go online to shop for auto insurance, all of the rates you’re comparing are generated by an algorithm that takes many factors into account. Everyone’s algorithm works a little bit differently, but there are a handful of metrics that almost every insurance company looks for including your credit history, coverage history, and CBIS.
If you’ve never heard of a CBIS before, you’re not alone. CBIS stands for “credit-based insurance score”, and it’s a number completely separate from your credit rating. This number is used to determine your overall risk – motorists with repeated violations have a less favorable score – but that’s not to say your credit score isn’t a factor. In fact…
Bad Credit can be a Major Setback
When you’re discussing a new insurance policy with an agent or entering your information into an online form, you’re essentially being evaluated for reliability. While your skill as a motorist is an extremely important risk factor, your credit score displays your ability to adhere to previous financial commitments, and if you can’t commit, that makes you a bigger risk. Have your car insurance quotes seemed a little steep? Your credit score could be to blame!
Your History with Other Insurers Matters
When you sign on with an insurance company, most companies are looking for a commitment. Clients that regularly drop coverage or don’t make their payments aren’t good for business, so if an insurance company determines that you have a spotty history of coverage, your rates could increase. Again, it comes down to your overall risk factor – if you’re more likely to drop coverage or experience a collision, you’ll likely have to pay more.
Your State has its Own Rules
Insurance laws differ dramatically across state lines, and it’s always a good idea to read up on your state’s individual policies. You may find that not all states are allowed to use the CBIS to determine client risk factors, but we’re just scratching the surface of what could be considered. Depending on your state, your past violations could lead to higher rates, and some insurance companies may refuse you altogether.
Luckily, all of this can also work for you benefit. Are you an exceptionally safe driver? Do you have a history of insurance without many lapses in enrollment? Then all of that information may be considered by an insurance company, indicating that you are a lower risk. Your rates are directly tied to your risk factor, so building a history of reliability is the most important thing you can do.
Buying insurance for the very first time or looking for a California auto insurance policy that won’t break the bank? Give us a call or click today – we have agents standing by, ready to answer your questions and walk you through the process of choosing and buying an insurance policy that fits your lifestyle, needs, and budget. Don’t settle for bottom-of-the-barrel insurance scams – give us a call or click today and rest assured that you’re not just getting the cheapest insurance policy – you’re getting the insurance policy that makes sense to you.
