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.
Your credit history affects the cost of your insurance premium.
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.
For example, if you are in debt, it is highly likely that you will be unable to pay to replace your roof or water heater. This can have a major impact because, in the event of a breakdown leading to a claim, your insurer will have to cover the costs.
Based on this principle, insurers prefer to offer discounts to individuals with good credit ratings. As a result, people with good credit ratings see their auto and home insurance premiums reduced.
Assurances Multi-Risques would also like to inform you that your credit rating has no connection to your annual income. Your credit rating is calculated based on your financial habits and your level of debt.
Can obtaining my credit score affect my credit report?
No, such a request will not affect your credit score. Insurers perform a credit check, not a credit application. Rest assured that your credit report will not be affected by requests for auto and home insurance quotes.
Is it mandatory to authorize your insurer or insurance broker to check your credit rating?
You are not required to allow insurers to check your credit report. Keep in mind that no insurer will refuse to insure you if you decline the check. However, by refusing, you may lose the opportunity to obtain additional discounts on your auto and home insurance.
However, insurers do not offer direct debit payments, and you will have to pay your insurance premium in a single installment.
We would like to clarify that your insurance agent or broker does not have access to your credit report. The insurer’s system is responsible for obtaining your credit report from a credit reporting agency.
We understand that some factors affecting your auto and home insurance premiums are beyond your control. You may have had your insurance policy canceled in the past due to non-payment of premiums.
However, keep in mind that by adopting good daily habits, you can improve your credit rating. This could lower your insurance premium for years to come!