Understanding How Your Credit May Affect Your Florida Insurance Premiums

It is possible that your credit score could have a profound impact on the amount that you are expected to pay for not only your automobile and homeowner’s insurance, but also for your health and life insurance in the near future. Here, we will analyze the ways in which your credit score can affect your Florida insurance premiums.

The Debate

The common debate among insurance analysts when it comes to customers’ credit ratings has to do primarily with bad credit. Many of these specialists feel that individuals who have bad credit pose a higher risk when it comes to their cars and homes, and this causes their Florida insurance premiums to spike somewhat. However, there are also some analysts who believe that an individual’s credit is not a reflection of his or her risk to the company at all and cite that things such as divorce, a job layoff or even a serious illness can lead to bankruptcy – even for the most responsible people.

Automobile Insurance

According to recent studies, about 92% of automobile insurance check consumers’ credit histories prior to issuing them policies. This is a surprising number for many people, but it should be considered that the result of a credit check is only one of the factors used to determine the Florida insurance premiums for these customers. Credit information can be used to determine whether or not to issue the policy and, if the policy is issued, how much the premiums will be. Insurers also take information about the vehicle, the driver’s record of accidents and violations, the average number of miles driven monthly as well as annually, and more.

Homeowner’s Insurance

When it comes to homeowner’s insurance, almost every consumer can expect to have his or her credit checked before the policy will be made effective. Again, and much like automobile insurance, the result of this credit check will have some impact on the individual’s Florida insurance premiums. Some other things that insurers will check in order to come up with a premium amount include the age of the home, its location, the construction type and any prior losses that have been associated with the particular home.

In the Future

Although most insurers do not use credit information when setting Florida insurance premiums for health or life insurance as of yet, the numbers are slowly climbing. Insurance companies are being led to believe that if a person has bad credit, he or she is likely to be irresponsible when it comes to his or her health. Some analysts have even cited that those who are risky with their finances may also be risky when it comes to actions that could threaten their health or even their lives. Of course, this is not always the case. Bad credit can happen to even the most responsible people.

The best way to avoid increased Florida insurance premiums due to bad credit is to shop around for a provider who does not take your credit into consideration or at least one that considers other things, such as your driving record, first and foremost.