Does your Credit Score Affect your Insurance Premiums?

If you’re in the process of renewing your auto and home insurance, you should be aware that most insurers and brokers that you contact will request your consent to perform a credit score check. Assurances Multi-Risques would like to explain why insurers are interested in checking your credit report. We will also explain what impact it can have on your auto and home insurance premiums.

To better analyze your credit report, most insurers want to review your credit. By doing so, they may be able to offer you reductions based on risk.

Did you know that the lower your credit score is, the more likely it is that your insurer will open a claim for you? Experts have shown that households with high levels of debt tend to care less about the upkeep of their home or automobile for lack of financial resources. For example, if your debt level has reached its maximum, it is very likely that you will be unable to afford to have your roof or water heater replaced.

This can have a major impact, because, in the event of damage, you will file a claim with your insurer, and they will then incur costs. Based on this principle, insurers prefer to give discounts to individuals with a good credit score. This is because they know that the possibility of a future claim is lower. As a result, people with good credit scores have reduced auto and home insurance premiums.

Assurances Multi-Risques also wants you to know that your credit score is not related to your annual income. The assessment of your credit score is based only on your financial habits and your level of debt.

Could it affect my credit report?

Insurers review a customer’s credit report; they do not make a credit application. Rest assured that your credit report will not be affected if you request quotes for automobile and home insurance. However, to save time, we recommend that you work with an insurance broker.

Are insurers and insurance brokers required to obtain a customer’s consent to view their credit score?

It is not mandatory to allow insurers to conduct a credit check. Furthermore, no insurer will object to insuring you if you refuse to give your consent. However, by refusing, you may lose the opportunity to get additional discounts on your car and home insurance. Most insurers will refuse to offer you direct debit payment. As a result, you will have to pay your insurance premium in a single payment. In addition, your insurance agent or broker does not have access to your credit report. It’s the insurer’s pricing system that takes care of getting your credit report from a credit bureau.

Certain criteria are out of your control when it comes to your auto and home insurance premiums. However, by adopting good daily habits, you can control this aspect and reduce your insurance premiums for the years to come!

Contact us today!

If you would like to learn more about this topic or how our agents can help you with your insurance needs, contact us today!