Are car insurance rates based on credit score?

Your car insurance rates and premium could be based on your credit score but it isn’t the only factor that determines it.

Some insurance companies (not everyone) require to run or check your credit score before offering their services.

Keep in mind: In most of the cases, before an insurance company runs your credit for a quote you need to allow them to do that. 

But insurance companies need to evaluate other factors such as:

  1. Driving record
  2. Your age
  3. The kind of car
  4. Miles and your driving routine 
  5. Your home and the way you protect your car- think garage.
  6. Your neighborhood  

Click To Read More: What Determines My Insurance Rate?

A low credit score could cause your premium to uprate but having a good score isn’t the only thing that matters. Having a good credit score and a low driving record, for example, could increase the premium as well.

It’s a combination of multiple factors that insurance companies analyze before giving coverage. Balance is key to getting an affordable rate.

What is an insurance credit score?

It’s the information based on your credit history report that insurance companies use to calculate how likely you’re to file a claim and also to know how much coverage brings you in order to ability to pay. 

Credit score

Is based on your credit history and shows the ability to pay back a loan over a period of time.

Insurance Score

Is based on multiple factors such as driving history, accidents, policyholders and can determine your likelihood of being involved in an accident.

Why do insurance companies want your credit score?

Insurance companies request your credit score information (and other factors) for some of the following reasons: 

  1. Determine your coverage
  2. Determine your coverage limit
  3. Used for a rating factor

What insurance companies want to evaluate is how risky of a driver you might be. This helps them calculate your potential likeness of filing a claim. If they estimate a person may be more likely to file a claim, the premium could increase if the policy is based on a credit score.  

Click To Read More: What Factors Affect My Car Insurance?

Do all car insurance companies determine rates based on credit scores?

In Texas, most of the insurance companies do. Check out the list of which company require to check your credit score before and which one don’t.

  1. Insurance Companies in Texas that use credit score
  2. Insurance Companies in Texas that don’t use it 

Source: Texas Department of Insurance

Can an insurance company deny me coverage because of my credit score? 

It depends on the type of policy and varies based on every insurance company, in general terms they can do it but there are some exceptions that protect people who are in a vulnerable situation:

In Texas, according to the Texas Department of Insurance, insurance companies can’t deny to cover you if your credit score was hurt because of:

  1. Divorce
  2. Temporary loss of employment 
  3. Victim of identity theft
  4. Death of your spouse, child, or parent

Be sure to send a request and provide documents that prove your situation and they can do the exception correctly. 

What is a good credit score for car insurance?

You can take this as a guide to what some loan companies and banks consider as a good or bad credit score. 

Having a good credit score affects your car insurance in a positive way, just remember it’s not the only factor to take into consideration.

Credit Score Rating
< 580Poor
580-669Fair
670-739Good
740-799Very Good
800>Excellent

Source: myfico.com 

Looking at the table above, we can say that more than 740 is a great credit score for the majority of auto insurance companies, and if you have a good driving record, safety features such as brake assist, and you drive locally, there is a good chance you may have received a lower auto insurance rates.

Does getting an insurance quote affect your credit?

It doesn’t affect your credit score because is a soft pull, which means the company just checks your credit report, not in a deep way

What can affect your credit score is a delay in payments, a lot of claims, or missed payments. 

 

What to do after a car accident in Texas? Checklist [At Fault & Not At Fault]

  1. Check for injuries and car damages.
  2. Move to a safe place.
  3. Call 911 as soon as possible to report the accident.
  4. Open your insurance mobile app.
  5. Collect other driver’s info such as insurance information, personal information, and driver’s license. 
  6. If any witness saw the accident, ask for their personal information too, it will be an important fact that your insurance company might need.
  7. Take & upload photos of the damage. The more proof you have, the better.
  8. Record a statement from the scene.
  9. Call your insurance company, you can find the number on your insurance card.  
  10. After an accident, both parties are responsible for reporting the accident and collecting info.

What do you collect after a car accident in Texas?

Other driver’s info to collect after a car accident

Your insurance company may ask you for this other driver’s info including:

  1. Policy number
  2. Name
  3. Phone Number
  4. Driver Licence
  5. Birthdate
  6. Address
  7. License plate number
  8. Car information (model, number and year) take photos if possible
  9. Give the same information to the other driver.

Should you move your car?

If no one is hurt, both parties should move their car to allow traffic flow. Just be sure to take photos of the situation before doing it.

When do I need to call the police?

Texas Transportation says to call the police in one of the following situations:

  1. Vehicles cannot be moved
  2. If you hit an insured driver  
  3. If you were involved in a hit and run accident
  4. The other driver was under the influence
  5. An injury or fatality happened

Do all accidents have to be reported?

Depends on what you would like to do. For best practices report the accident to 911 and your insurance company. 

You may ask, “Do I need to contact my insurance after a minor accident?” and there is no yes or no answer. It’s your personal decision but for best practices report your accident. 

Before doing it, just remember what type of coverage you have. If you’re not sure about that, feel free to ask and follow your agent’s advice.

If your auto insurance company has an app, you can file a claim on your mobile phone. 

Is there a time limit to report a car accident to insurance?

The sooner, the better. Most of the companies have deadlines to file a claim. Get to the point and explain what happened, get your info, other driver’s info, witness details, and photos.

What happens if I don’t call my insurance after an accident?

Things can turn complicated. Your carrier may not cover your accident and you may end up having to pay out of pocket.

Do I have to pay a deductible if I was not at fault?

It depends on two things: 

  1. in At-Fault Systems like in Texas, just if the at-fault driver’s policy isn’t enough to cover your damages, so then you need to be covered by your insurance company and that also means, you’ll pay the deductible but your company may pay you back by recovering from other driver or insurance company. 
  2. To do that, you have to be sure you have collision or uninsured coverage. 

Click To Read More: Why Is It Mandatory To Have Auto Insurance in Texas?

Do I need to contact my insurance company if I not at fault? 

If you’re 100% you’re not at fault, the best thing you can do is call to other driver’s insurance company. So be sure to collect all the info about the third party. 

If you’re not really sure, you can call your insurance company to follow their instructions.

Keep in mind: every time your insurance company covers you, you need to pay deductible even if you’re not at fault.

How does car insurance work if I’m not at fault? 

Talking about the auto insurance industry in Texas, if you’re not at fault, the other driver’s insurance company may be able to pay for your damages and medical bills. But first, they need to do an investigation to determine who was at fault. If they determine you’re not at fault, they will be covered based on the at-fault driver’s policy limits. 

Will my premium go up if I am not at fault? 

It’s not as simple as a yes or no answer, your auto insurance company needs to review the situation and determine if your premium will go up. We must say, having an accident, regardless of your not-at-fault, could mean changes in your policy.

Can both parties be at fault in an accident? 

Yes, insurance companies can decide if both drivers are at fault. In that case, each part should file an insurance claim. 

Does a no-fault accident go on your record? 

Yes, in Texas any time you’re involved in a car accident -regardless who was at fault- or traffic violation it might appear on your record. It will be cleaned after 15 years, except Driver Under Influence violation that never will be removed from any driver record. 

You need to check with your insurance company if that may affect or higher your insurance premium. Sometimes affect and sometimes doesn’t. It depends on many factors such as your type of coverage.

What to do after a car accident that’s your fault?

  1. Do not flee the scene. It’s illegal and the consequences are far worse. 
  2. Do not say you’re at fault, even if it might be. Let the facts and adjusters determine fault.
  3. Share your information with the other driver if necessary. 
  4. Report the accident. 

Even for at-fault accidents, the insurance policy in Texas may cover the following third-party damages:

  1. Medical fees and hospital stays for the driver and passengers.
  2. Repair or replace the vehicle.
  3. Rental car reimbursement
  4. Lost wages for injuries.  

If the cost of the damages exceed what at-fault driver’s policy limits, the damage driver may fill a policy with their insurance company to pay for the difference if they have collision coverage.

Sometimes, insurance companies decide both drivers are at fault and will pay part of the claim.

Does insurance pay if it’s your fault? 

Yes, if at-fault drivers have liability coverage, the insurance company will cover other driver’s damage. Unless the at-fault driver has collision and comprehensive coverage, their insurance company may be able to cover their own damages. 

It depends on the policy limits how much coverage at-fault drivers will be. 

Should you admit fault in a car accident? 

Not really, the best thing that both parties can do is wait for the insurance company and cops decision. 

Stay in the collision area, never leave the scene, take witness information, give your own driver and insurance information, ask other driver’s information and follow the instructions of the authorities. 

If they determine who’s the at-fault driver, this person needs to be responsible and follow the law. 

How does insurance decide who is at fault? 

Insurance companies look at the state laws and traffic rules to determine which driver is at fault. Also, they talk with the involved drivers and making a liability decision by getting statements for involved parties. 

Does a police report say who was at fault? 

It might say but isn’t the only thing that auto insurance companies consider to determine who is at fault. Why does it happen? In the end, most of the time, police came after the accident and they report what they saw and what involved parties said about.

That’s why, regardless the police report indicates who is at-fault, auto insurance companies need to investigate before give their last verdict. 

How long does an at-fault accident stay on your record? 

In Texas, your record will be cleaned after 15 years in most of the cases, but car accidents because of Driver Under Influence (or Driver While Influence) or another type of serious driving violation never be removed. 

Every insurance company has different rules to rate after driving violations, some of them after DUI 

Texas is an at-fault state and it’s illegal to drive a car without auto insurance. Be a responsible citizen and get the coverage that protects you against accidents.

After everything has been filed, give your company some time to process and gather all the details. stay in touch with your adjuster and agent.

They work for you and are there to help assist in this unforeseen period. 

Does your auto insurance cover driving under the influence (DUI) accidents?

In a short answer, your auto insurance might cover you even if your at-fault driving under the influence (DUI), but after the contract ends your carrier could deny your renewal of the policy and the driver will be considered a risky driver and may get high rates. 

Read more-> Myth or Fact: Do Car Accidents Increase in the Holiday Season?

Your protection depends on your type of coverage 

Let’s go step by step… 

Like almost everything in the auto insurance world, it depends on the type of coverage. Your insurance might cover you depending on what you have. If you have liability coverage, after a drunk driving accident the insurance company will only pay for the third party damages. 

Besides liability, collision, comprehensive and medical payment usually covers the driver at-fault or if they were hit by another driver under the influence. 

But if we’re talking about coverage, your insurance could pay for car damages, medical expenses, or third-party damage.  

Does drunk driving void your insurance?

The insurance agent or company cannot deny coverage but they could cancel at any time or refuse to renew your policy in some of the following cases:

  1. The insurer doesn’t pay their premium. 
  2. Insurers file a fraudulent claim. 
  3. Driver’s license is suspended or revoked (that could happen after Driving While Intoxicated)
  4. Insured is now considered high risk- and renewal could be a liability. 

Texas Department of Insurance said the auto insurance company must refund any unearned premium to the insurer 15 days after the day of the cancellation. 

For nonrenewal cases, the insurance agency or company must tell you in writing, at least 30 days before the contract ends. 

How much is insurance after a DUI?

There is no doubt that a driver involved in an accident due to being under the influence would be labeled as a high-risk driver.

This could result in expensive consequences such as:

  1. Premium rates will increase
  2. Car insurance policy could be canceled

This number varies based on your carrier and the state. According to alcohol.org, it could increase between $1000 and $10,000 depending on the company, state, and situation. Insurance companies may double or triple the rate.

How long does driving under the influence affect your auto insurance? 

In the majority of states, a DUI can take several years to clear your record after being in an accident. In Texas, the driver never gets a DUI conviction removed from their record. 

Commonly, auto insurance companies check motor vehicle records of their insureds. It depends on each company or agency if after three years (or more) they want to give a standard auto insurance rate regardless of the driving record. 

What happens after being caught driving while intoxicated? 

In Texas, any person with a .08 Blood or Breath Alcohol Concentration is considered under the influence and can face tremendous consequences if caught driving under the influence. 

First Offense: 

  1. A fine of up to $2,000
  2. Three days to 180 days in jail 
  3. Loss driver’s license (minimum of  2 years)
  4. Annual fee of $2,000 at least during three years

Second Offense:

  1. A fine of up to $4,000
  2. One month to a year in jail
  3. Loss of driver’s license (minimum of  2 years)
  4. Annual fee of $1,000, $1,500, or $2,000 for three years to retain driver’s license

Third Offense:

  1. A $10,000 fine
  2. Two to 10 years in prison
  3. Loss of driver’s license (minimum of  2 years)
  4. Annual fee of $1,000, $1,500, or $2,000 for three years to retain a driver’s license

Source: Texas Department of Transportation

When a driver is caught driving drunk with a child passenger, the fines are even higher.  

Also, most of the punishments above depend on the driver’s age. For example, a driver over 21 years old, must fill a Financial Responsibility Certificate (SR-22) from their insurance company. 

For drivers under 21 years of age, they receive one year of driver’s license suspension, they could be required to serve during the suspension period, fill the SR-22, and so on, according to the Texas Department of Public Safety.

Those who refuse to take a blood alcohol test while being pulled could result in a suspended driver’s license for 180 days, according to the Texas Department of Transportation.

How can I lower my auto insurance after a driving under the influence (DUI) ticket?

  1. Always have auto insurance, the lack of insurance protection means expensive consequences
  2. Increase your deductible and could pay less on your premiums
  3. Follow the law to avoid traffic infractions
  4. Drive less to lower your mileage and the probability to have accidents. 
  5. Take care of your car by keeping it in the garage and installing anti-theft alarms.
  6. Maintain a good credit score. 
  7. Don’t let the same mistake happen again. Try a sober ride such as Uber or Lyft. 

The best thing that you can do is to drink responsibly. Sadly, car accidents caused by driving while intoxicated are the reason for several fatalities during this time of year. It’s not only what could happen to your insurance rates or car damages, but consider your life and other’s life.

Have a safe and happy new year. See you in 2020!

News and updates for auto insurance in Texas 2020

Auto Insurance industry in Texas has news for insured drivers starting January 1, 2020.

The first and the most important is the named driver insurance policies and exclusions

Let’s catch up with the change because it could impact your premium and the way your named drivers are being covered. 

How named driver’s law used to work?

Let’s go back in time a little bit.

Auto insurance laws in Texas used to cover people whose names were written on the policy by the policy owner. 

For example: I have auto insurance and I listed all the names (persons) that will be covered if they drive my car. If I’m a mom I may write my son’s name. So, if one of them has an accident while driving my vehicle depending on coverage, my insurance would cover them. 

That’s why it was so important to only lend your car to your named drivers or other insured drivers. 

Named driver policy is “an automobile insurance policy that does not provide coverage for an individual residing in a named insured’s household specifically unless the individual is named on the policy.

The term includes an automobile insurance policy that has been endorsed to provide coverage only for drivers specifically named on the policy”.

See Texas Insurance Code §1952.0545 and 28 Texas Administrative Code §5.208.
Texas Department of Insurance.

How named driver will work in 2020?

From January 1st, 2020 Texas Legislature will prohibit auto insurers to extend coverage into “named driver” policies, which means that you can’t renew with the same coverages.

Instead, in 2020 every person living in a household will be covered by your auto insurance if they drive your car. Regardless of family bonds, so they could be your wife, son, girlfriend, boyfriend or even your roomie.

You can live in-home, mobile home, duplex unit, apartment, condominium or multi-unit residential and your policy might cover you and people who live with you.

As you can notice it is s exactly the opposite of the last-named driver policy.

What if I need to exclude people from my car insurance?

This is called “Named driver exclusion” means you can exclude drivers living in a household from your policy.

Be sure to notify each driver’s name you want to exclude. In addition, the excluded driver has to be informed and accept the exclusion in writing.

Exceptions of named driver exclusion

If you renew your policy before Dec. 31, 2019, the coverages stay the same. anything that renews in 2020 will be affected.  

Talk to your auto insurance agent

For the best guidance, speak with your insurance agent, He or she will know how the laws affect your policy. It’s important to be informed about how your coverage will work in 2020 before being surprised.

Check for more info by  clicking here

Now, you’re all caught up with Texas auto insurance news. If you’re planning to renew or get your policy by the first, keep this law update in mind.

Beginners Guide: What should I look for Home Insurance?

anatomy of safest house for a low home insurance rate

If it’s your first time looking for home insurance, congratulations!

Most likely your lending company is requiring you to have it or you just want additional coverage. Whatever the case is, don’t go fast and take your time before choosing your home insurance policy.

According to our home insurance agents, consider these things for home insurance in Texas. 

Why you need home insurance?

Are you planning to get a home loan? Definitely, home insurance is required for this. Although, it is not the only reason for having it.

Texas is a great state, we’re proud to live here but it’s no secret every year natural disasters occur. We can’t avoid them but we can protect our assets. 

The most common natural disasters in the area are:

  1. Flash Flood
  2. Hurricanes
  3. Extreme Cold
  4. Lightning
  5. Tornados. 

What kind of coverage is right for my home?

Looking at the natural disasters mentioned above, If you live in Texas, protect your patrimony from those. During the unforeseen weather conditions, rest assured you are covered and focus on your family and their safety.

Take notice, most policies don’t usually protect your home from flooding, or busted pipe leaks. However, consider these additional coverages based on your location

Six types of home insurance in Texas

The following six coverages are usually included in your home policy, but it’s good to know what are you protecting. Always ask your insurance agent if your policy includes one of these or what is best for you depending on your needs. 

1. Dwelling coverage

Can pay if your house is damaged or destroyed by something your policy covers.

2. Personal property coverage 

Can pay if your belongings are destroyed, stolen or damaged. {PRO TIP: This why you should bring your belongs inside the house and not leave in your car.}

3. Other structures coverage 

Repair structures on your property that aren’t attached to your house, like  fences, storage sheds, and detached garages. 

4.Loss of use coverage

If you have to move while your house is being repaired because of an accident, this coverage can pays additional living expenses like rent, food, and other costs you wouldn’t have if you were in your home.

5. Personal liability coverage 

Can pays medical bills, lost wages, and other costs for people that you’re legally responsible for injuring. 

6. Medical payments coverage 

Perfect for pet owners because this can pay the medical bills of people hurt on your property or if something happens away from your home like your dog bites someone at the park.

Source: Texas Department of Insurance

Enough coverage to replace your home 

It is possible, choose replacement cost coverage over actual cash value coverage. This helps you replace or repair your house if needed during a devastating time. 

Choose Replacement Cost that match the current price for items in your home. As you know, year by year prices are higher and your belongs will be more cost more to replace.

In shorter words, if your roof cost $3,000 years ago, repair it right now will cost more. With this coverage, your insurance company may only pay the cost associated with the value at the time of purchase versus what it will actually cost to repair.

Our advice-  Speak with your local independent insurance agent on the coverages that make sense for you and your home. Licensed agents are experts in their field and can provide guidance.

Consider what type of belongings you have

Insurance agents emphasize how important is to be aware of your assets.

Your Texas home insurance can cover you from:

  1. Clothes
  2. Furniture
  3. Electronic device

What commons policies don’t cover is:

  1. Jewelry
  2. Fine arts
  3. Antiques

To have control over your belongings, create a home inventory. It helps you before getting home insurance and make it easier during the claims process.

Click here –> You can download our free home inventory template that is ready-to-use and editable.

Pets could increase your premium

Even though home insurance tends to cover you, having a dog could increase your premium if your furry friend bites someone.

Typically if you have one of these breeds:

Alaskan Malamute

Chow chow 

Doberman Pinscher

Pitbull

Rottweiler

Siberian Husky

Wolf Hybrid 

We know every dog is the best for their owner, we love them. Just keep in mind and seeking coverage that gives you the best rate, protection and won’t deny you coverage because of your furry pal

What is the best way to compare home insurance quotes?

Comparing quotes one by one it’s overwhelming and can be a waste of time. There are a lot of options on the internet, word of mouth recommendations and insurance companies around you. 

The best way to compare home insurance quotes could be by talking with an independent agent for this simple reason: they can compare and recommend you the best quote for your needs from several companies at once.

They partner with top-rated carriers and offer options, rates, and coverages that fit your needs for the best rate.

How do I choose a home insurance provider?

At last but not least, who will get coverage from? You have some options: a captive agent– can only offer one product/ company (i.e. State Farm, Farmers Insurance, etc.) or an independent insurance agency.

Look for history and experience 

Working with an independent agency isn’t enough, look for an agent that has years of experience because they can offer expert advice and be a knowledgeable resource for you. Your agent should be your advocate. They don’t work for one particular company, so their job is to provide you the best resources.

If you have doubts about your next Texas home insurance policy or would like an insurance check up, give us a call at 1-800-842-6572 or get a quote clicking here.