How does my credit score affect my insurance rates in Florida?

Are you concerned that your credit score might affect your insurance rates in Florida? The truth of the matter is that your credit score is one of the factors insurance companies use to determine the prices of your policy, and it can positively or negatively affect your monthly premiums. Let’s take a look at how your credit score can affect your Florida insurance rates and what you can do about it.

How Your Credit Score Affects Your Florida Insurance Rates

When it comes to credit scores, you’re probably familiar with companies running your credit in order to determine if you’d be a good fit for a loan or to determine how much interest you should pay on that loan. Car insurance companies do the same thing, but their purpose is different. Instead of determining how likely you’d be to miss a payment or pay off your loan on time, insurance companies want to try and estimate how likely you’d be to file a claim. The assumption is that individuals with lower credit scores will file more insurance claims and cost the insurance company more money because they are less likely to have the finances available.

Conversely, individuals with higher credit scores are believed to be more likely to handle small issues themselves. For example, if a lightning strike destroys the homeowner’s computer, they’d be more likely to simply go to the store and purchase a new computer rather than turn the loss in on their homeowner’s insurance policy.

The Credit Score Factors That Affect Your Insurance Rates

Insurance providers typically perform soft inquiries that don’t affect your credit score. This means they’re looking at your existing accounts to see if you pay your financial obligations on time.

Credit Score Details That Look Good to Insurance Companies

  • You have an in-depth credit history.
  • You do not currently have any late payments or accounts that are past due.
  • All of your open accounts are in good standing.

Credit Score Issues That Can Affect You Negatively

  • You have accounts that are past due.
  • You have accounts that have gone into collections or been sold to debt collectors.
  • You’ve used a lot of your available credit.
  • Your credit history isn’t very long, or you don’t have a credit history.
  • You’ve recently had a high number of inquiries on your credit.

What You Can Do to Make Your Credit More Appealing

If you’re concerned that your credit history and credit score are negatively affecting your insurance rates, you should request a copy of your credit report from one of the three major credit bureaus, including Experian, Equifax, and Transunion. You can request a free copy of your report with the three bureaus once a year. Look through your report to make sure that everything is correct. If you find errors, dispute them. Additionally, you’ll want to:

  • Make sure you pay all your accounts on time.
  • If you happen to miss a payment, ensure that you bring your account current as soon as possible.
  • Pay down any outstanding debts, especially credit cards. This will improve your debt-to-income ratio.

Other Factors That Affect Your Florida Insurance Rates

It’s important to understand that Florida insurance companies look at more than just your credit score when determining your rates. They also look at the following:

  • Your claims history
  • Where you live
  • Your age
  • Your gender
  • Driving history if you’re getting car insurance
  • How many years you’ve been driving if you’re getting car insurance
  • The types and amounts of coverage you need

How to Lower Your Florida Insurance Rates

Even if you have less than stellar credit, you can still take some steps to ensure that your insurance premiums are affordable while you work on your credit.

  • Look at policies from multiple carriers. Not all carriers use the same metrics or weight those metrics in the same way.
  • Get more than one insurance policy with the same carrier in order to get a multi-line discount.
  • If you’re in college and have good grades, ask if your insurance carrier offers good student discounts.
  • Ask if the carrier offers good driver discounts. This usually applies to drivers who have been accident-free for a certain number of years.
  • If you’re in the military, ask if they offer military discounts.
  • Cars that are newer with improved safety devices often cost less to insure.
  • Ask for low mileage discounts if you don’t drive much or work from home.
  • Raise your deductibles to get lower insurance premiums. However, you never want to raise your deductible to an amount you can never afford.
  • Get a quote for insurance on the cars you are thinking about buying. This is because some cars are less costly to insure than others.

Get Affordable Insurance in Florida from Fearnow

At Fearnow, serving Florida, we offer insurance policies from multiple carriers. In fact, we have the ability to look through policies from more than 100 insurance carriers in order to help you find the right policy for the right price. We have home, car, boat, and commercial insurance policies available.

To learn more about our insurance policies and to get a quote, call us at 813-689-8878.