2006-12-30 22:13:55 · 22 answers · asked by spring06 1 in Business & Finance ➔ Credit
Because they are assuming risk. Risk that you will get into an accident, that they will have to pay your bills, that you will get sued, etc. That's the point of insurance.
In exchange for taking on this risk, the insurance company charges you whatever premium. This premium covers the company's risk and provides profit. If you dont pay the premium, then the company is taking on risk without getting compensated for it. And to an insurance company the potential costs of paying out a claim are very high. They want to make sure you will be reliable in making your required payments. Hence, the credit check.
Also, unlike say a mortgage, the insurance company doesnt have a claim against your assets if you dont pay. If you dont pay your mortgage, the bank can take your house. If you dont pay your car insurance, the insurance co cant take your car.
2006-12-30 22:21:27 · answer #1 · answered by sothere! 3 · 0⤊ 1⤋
Insurance is all about numbers. Huge studies have shown a correlation between credit scores and insurance claims. In making a decision about your insurance-worthiness, the company has little choice but to lump you in with similarly situated people...they don't know you personally. Thus, even though you might be the safest driver in the world, you are penalized for the bad deeds of others like you...yet another reason to get the credit score up!
2007-01-01 05:56:39 · answer #2 · answered by Jason 3 · 0⤊ 0⤋
This site will be very helpful for finding the best price ofr you: INSURE-HELP.COM
2014-05-15 10:38:20 · answer #3 · answered by Anonymous · 3⤊ 0⤋
Compare quotes for free at - ASSURECOMPARE.INFO-
RE Why do insurance companies do a credit check. bad credit doesnt make you a bad driver and the same with good?
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2014-09-21 12:50:55 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Insurance companies believe that people with bad credit, have bad character and are irresponsible. People with bad character have bad credit, are irresponsible drivers, and are more likely to get in an accident. That's the insurance company theory.
The problems is that older, retired people who don't have debt and have paid off their house also have to pay the higher rates for insurance because they dont' have FICO scores at all.
2006-12-31 01:02:13 · answer #5 · answered by KC 4 · 0⤊ 0⤋
It has nothing to do with payment but more to do with fraud. They could care less if you pay or not, they will just cancel you. No one owes an insurance company because it's a "pay before we insure you" business.
On the other hand, if you group insurance fraud by credit rating, it is highest in the lower credit rating group. Why? Because they need the money! This is NOT to say that this is your intention, as it probably isn't, but one bad apple spoils the bunch.
2006-12-31 00:20:22 · answer #6 · answered by Kevin K 3 · 0⤊ 0⤋
I might suggest that you try this site where you can compare rates from different companies: http://COVERAGE-FINDER.NET/index.html?src=3YAkxpjdKC21
RE :Why do insurance companies do a credit check. bad credit doesnt make you a bad driver and the same with good?
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2016-11-26 13:07:43 · answer #7 · answered by ? 6 · 0⤊ 0⤋
I might suggest you to visit this web page where you can compare quotes from different companies: http://COVERAGEQUOTES.NET/index.html?src=2YAfqdmfUM72
RE :Why do insurance companies do a credit check. bad credit doesnt make you a bad driver and the same with good?
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2016-08-23 17:58:13 · answer #8 · answered by ? 6 · 0⤊ 0⤋
Well like any business, insurance companies need to make sure that if they are going to insure your vehicle, they need to know what kind of payer you are. Are you a slow payer better than average payer, do you have any judgements on your name or even worse, are you black listed. This is just away of protecting their own butts. Companies don't like doing business with people that don't pay. It is a normal part of doing business today. Most of your companies out there do credit checks now. Good Luck
George.
2006-12-30 22:22:58 · answer #9 · answered by Anonymous · 0⤊ 0⤋
Bad credit = bad risk. They want to make sure that you won't fake claims for money.
All State got busted doing this a few years ago. They denied me homeowners insurance after I had their auto insurance for 5 years. They claimed my credit was bad. Mind you, I just bought a house and a car...I knew I was in good standing. A few years later, they had a class action lawsuit.
2006-12-31 01:50:32 · answer #10 · answered by Anonymous · 0⤊ 0⤋