It may come as a surprise to many, but one of the factors that auto and home insurance companies may take into account when deciding on the insurance rates to charge a particular customer is that person’s credit rating. Some companies will refuse to offer cover to people with low credit ratings. Others will offer cover but will charge people with low credit ratings higher premiums than those charged to people with a high credit score.
Insurance companies are legally entitled to do this, but the measure is controversial, and many high-ranking politicians and other parties have spoken out against using credit scores to calculate premiums. The insurance companies believe that people with lower credit ratings are more likely to make insurance claims. This may be because their financial worries may distract them from taking normal precautions while driving, for example. There is also the belief that financial pressures may encourage people to submit fraudulent claims.
While insurance companies are not able to produce concrete proof that people with low credit ratings are a higher risk, they are not prepared to back down on charging higher premiums, or refusing cover entirely. People who find they are adversely affected by a poor credit score should use an online quote comparison service to find the best insurance deal possible.
Company Name: Abraham Enterprises
Contact Person: David Abraham
Email:Send Email
Phone: 800-351-5976
Country: United States
Website: http://www.rapidinsurancequotes.com
