Farmers Insurance, Allstate, State Farm, Progressive & GEICO charge between 40% and 102% more for car insurance to drivers with bad credit
When it comes to car policy price, a bad recognition score is going to cost you more .
Two late studies drive home this point. I should point out that these are merely the most recent studies showing how unfair it is for car policy companies to use credit scores to hammer drivers with safe driving histories but poor credit scores. For readers of this car lawyers blog, this is a point I ’ ve made repeatedly in the past .
The two most late studies on car policy and credit scoring conclude :
- In its May 24, 2017, study, “Drivers With Poor Credit Pay Higher Insurance Rates in Most States,” NerdWallet found that Michigan drivers “with poor credit” pay $1,969 more per year than drivers “with good credit.”
- In its July 13, 2017, study, “2017 Auto Insurance & Credit Score Report: Does Credit Affect Premiums?,” WalletHub found that “[p]eople with no credit pay 65% more for car insurance than people with excellent credit, on average,” and Michigan drivers “with no credit” pay car insurance premiums that are 105% more than drivers “with excellent credit.”
Credit scoring is illegal in many states. Why do we allow car insurance companies to use credit scores in Michigan?
The high price of car No-Fault policy has been in the news, specially in cities like Detroit .
But practices like accredit seduce and redline besides contribute substantially to the high price of car No-Fault policy .
Michigan ’ s “ highly profitable ” cable car policy companies charge more to drivers and consumers in Detroit and Flint and other cities in Michigan .
Detroit Mayor Mike Duggan has about entirely ignore how much credit seduce and redlining drives up the price of cable car indemnity and harms people in Detroit. Inexplicably, Mayor Duggan would quite focus on badly flawed ideas like D-Insurance. Make no error, D-Insurance will harm Detroiters who need car No-Fault the most. never one to admit a err, Mayor Duggan is immediately doubling down and spending his time and political capital on expanding the atrocious idea of D-Insurance statewide .
Want to lower car insurance rates in Detroit? Start with credit scoring
We — and particularly Michigan lawmakers — know at least one of the main reasons why rates are so high, yet the politicians stubbornly persist in their refusal to take any action to help relieve the fiscal burden for consumers.
The fact that insurers are using otherwise safe drivers ’ credit scores to discriminate in their price-setting process should come as no surprise .
I ’ ve tried to do my part to bring much-needed attention to this important issue .
I ’ ve blogged about how credit scores punish Detroit drivers with higher car indemnity rates and how consumers with bad credit could pay arsenic much as 115 % more for cable car insurance .
How does MI compare on using a driver’s credit score to set car insurance rates?
NerdWallet ’ s study reported the keep up findings :
- Michigan drivers “with poor credit” pay $1,969 more per year for car insurance than drivers “with good credit.”
- Among the 47 states and District of Columbia which allows insurers to use drivers’ credit scores in the rate-setting process, “Michigan had the largest rate disparity between motorists with good and poor credit” — ranking #1 for the biggest “[d]ifference in rates between drivers with good and bad credit.”
importantly, only California, Hawaii and Massachusetts prohibit car indemnity companies from “ us [ ing ] … people ’ randomness accredit ratings in car insurance rates. ”
What car insurance companies are using a driver’s credit score to set rate?
importantly, as noted above, the WalletHub study determined that “ [ vitamin d ] rivers with no credit pay at least doubly a a lot in … MI, ” i, a 105 % “ premium fluctuation ” between “ people with no credit ” and “ those with excellent credit … ”
additionally, WalletHub calculated that, in the states and D.C. where recognition scores can be used by insurers in the rate-setting march, Farmers Insurance had the largest “ average premium fluctuation ” between what was charged to drivers with “ excellent credit ” and to drivers with “ no credit history. ”
here ’ s how Farmers compared to early insurers in WalletHub ’ s psychoanalysis of the “ average difference between premiums ” by “ five of the country ’ sulfur largest car policy companies ” :
- Farmers Insurance: “Average Difference Between Premiums: 102%”
- Allstate: “Average Difference Between Premiums: 79%”
- State Farm: “Average Difference Between Premiums: 58%”
- Progressive: “Average Difference Between Premiums: 55%”
- GEICO: “Average Difference Between Premiums: 40%”