Stephen (North Dakota): I would like to compare auto insurance quote online but am worried if it would affect my credit score? This is because I have heard that insurance companies check your credit worthiness before giving insurance. Would I not be insured if I claim bankruptcy?

Response: Stephen, I would advice you to compare auto insurance quote online since if you compare your auto insurance quote online than your credit score for auto insurance rating would certainly not be affected. This is because the insurance companies would just process the data online and give you a quote without verifying your credit score. Than once you apply for insurance they would check your credit score. Secondly this is a soft hit to your credit and hence will not affect your credit score.

The connection between a driver’s safety record and credit rating is not readily apparent to most. Many consumers feel that insurance companies are intrusive when they request such information on an automobile insurance application. Many legislators, insurance commissioners, and consumer rights advocates agree, and have questioned the practice in recent years. Still, insurance companies explain that credit information is needed to make a complete risk analysis when evaluating an insurance application.

If you have filled bankruptcy than your auto insurance premium would be very high. At times some personal lines insurer might decline your risk.  Recently in the revisios of auto insurance in Ontario it is proposed that the credit rating should not affect the insurance rate and this parameter should not be a ground for denying car insurance coverage.

 It seems that there is a connection between credit risk and safety risk. Some insurance company statistics show that drivers with derogatory credit, historically file more accident claims than drivers without derogatory credit. Insurers reason that a consumer who is careful with one aspect of their life (e.g., financial affairs) is also likely to be careful with other aspects of their life (e.g., driving habits). Credit information is also needed to determine whether an applicant is likely to pay premiums in a timely fashion.

As per the insurance companies they like to review the credit scrore since this is a right measure for the nature of responsiblity of a person. If he has a good score it would mean that he is likely to be responsible on the road also. This would decrease the probability of loss to a great extent.

Dianara :What determines the price of my auto insurance policy?
Respionse : There are many factors that influence the price you pay for auto insurance. The average American driver spends about $850 a year. Your premium may be higher or lower, depending on the following :
1.Your driving record:The better your record, the lower your premium. If you’ve had accidents or serious traffic violations, you will pay more than if you have a clean driving record. You may also pay more if you haven’t been insured for a number of years or are a new driver.
2. Mileage of use :The more miles you drive, the more chance for accidents. If you drive a lower than average number of miles per year, less than 10,000, you will pay less. For instance, some companies will give discounts to policyholders who carpool.
3. Geographical area :-Where you live. : Insurance companies look at local trends, such as the number of accidents, car thefts and lawsuits, as well as the cost of medical care and car repair.
4.Your age:In general, mature drivers have fewer accidents than less experienced drivers, particularly teenagers. So insurers generally charge more if teenagers or young people below age 25 drive your car.
5.The car :The car you drive decides your insurance rate.Some cars cost more to insure than others. Variables include the likelihood of theft, the cost of the car, the cost of repairs, and the overall safety record of the car.
6.The amount of coverage.Of course, like anything else, the more coverage you have, the more you pay. However, you may qualify for discounts.
It is best to compare your car insurance rates and auto insurance online for free and see what the changes are. Friends this is a dynamic market and so it pays to compare auto insurance quotes – 411.