Whether you have bad credit or not, comparing rates with multiple car insurance companies is always in your best interest. You can begin comparing rates with all top-rated providers on your right. Rates will display on the following screen.
Having bad credit is daunting enough. Clearly, we don’t want the task of finding affordable car insurance to pile up additional stress.
The good news is that we intend to provide insight and direction as to how to find the best car insurance with bad credit.
We have taken the time to review more car insurance providers than we can count.
Below, you can see what we intend to cover in today’s brief overview. Use the links directly below to skip around throughout the article to find specific information.
- Best Car Insurance Companies with No Credit Check
- Car Insurance and Credit Scores
- Car Insurance Providers that Allow Bad Credit
- Rates Will Always Vary Based on Location
- Consider Lower Coverage or Usage-Based Car Insurance
- Why Do Car Insurance Companies Use Credit Scores?
- Other Methods to Save On Car Insurance
- Begin Improving Your Situation
- Final Thoughts
Shopping for car insurance is tedious. Let’s Get to The Root of It! Here are the key takeaways.
Shopping for car insurance with bad credit is not only frustrating but time-consuming. Several factors will be taken into consideration to determine your overall rates when purchasing auto insurance. In addition to considering higher-risk companies, you can also implement other savings techniques to help offset the cost of car insurance with bad credit such as usage-based coverage or raising deductibles.
During this post, you will be able to gain an understanding of why car insurance companies take credit into consideration and what you can effectively do about it to achieve lower car insurance rates.
Ultimately, it’s all about helping you find the best car insurance in your area.
Best Car Insurance Companies with No Credit Check
When shopping for car insurance with bad credit, you can take 1 of 3 paths.
First, you can consider a company that doesn’t require a credit check at all.
Typically, this won’t be in your favor strictly due to the higher premiums.
Option 2 is to consider companies that typically offer decent rates for individuals even after a credit check and revealing that you do have below-average credit.
Option 3 is to consider companies that specialize in high-risk drivers.
These companies typically have limited availability and offer much less robust coverage in general.
Your state of residence will always have an impact, as well.
First, let’s start with the option that doesn’t require any credit check at all.
If you want to go in this direction, you can consider companies such as the following based on your state of residence.
2 Options for Car Insurance with No Credit Check Required
Cure Auto Insurance– Cure is a car insurance provider that does not require credit checks, but currently, you need to reside in Pennsylvania or New Jersey to qualify.
Dillo Auto Insurance- Dillo auto insurance will allow you to purchase car insurance without a credit check but is currently only available in the state of Texas.
As stated before, even if you live in New Jersey, Pennsylvania, or Texas, this likely still isn’t your best option to consider.
Best High Rated Auto Providers With Poor Credit
In most circumstances, you are going to be better served looking at the top-rated car insurance providers you see on a typical basis.
We already know that credit does indeed impact your car insurance premiums.
However, the companies that rank at the top for the most competitive pricing in general, also remain the most competitive car insurance options, even with a bad credit score.
Here are some of those options you should consider:
Best Companies for High-Risk Profiles/Drivers with A Credit Check
Last but not least, if you need to find someone who specifically specializes in high-risk drivers, you can look at companies such as the following listed out for you below.
Keep in mind, as stated before, that the coverage options are limited, state availability is limited, and overall, you aren’t getting much protection with some of the options listed.
Some of the companies will offer liability only as an example.
Here’s a quick list of the companies we recommend that specialize in high-risk auto insurance.
Access Insurance Company- Available in 22 states but known for poor customer satisfaction.
Alliance United Insurance Company- A decent mobile platform and 4 discounts available.
Dairyland- Available in 42 states.
The General– One of the more popular and reliable high-risk auto insurance companies with large state-availability.
Direct Auto- Excellent financial strength ratings and offers SR-22 insurance
Infinity– Good Availability, financial strength with great mobile platform available in Spanish and English
Car Insurance and Credit Scores
If you have been shopping for car insurance and you have bad credit, it’s no secret that the prices are elevated.
For the average consumer, you are likely confused and feel frustrated.
The unfortunate truth is that premiums are inflated substantially for having a low credit score.
Here’s how car insurance providers will typically look at credit.
300-579- These are the lowest scores or the highest risk credit profiles.
On average, across the US, consumers will pay roughly 600.00 more for car insurance every 6 months compared to someone with a 740-799 credit score.
For being a few hundred points lower, you are paying nearly an additional 100.00 per month.
600 every 6 months= 100 more per month.
If your credit is effecting your car insurance rates, check out information about increasing your credit score from our friends at Credit Knocks.
Rates Will Always Vary Based on Location
Another significant factor to keep in mind is that car insurance providers and overall pricing vary greatly based on the state you live.
For example, both car insurance providers listed above that offer car insurance without running a credit check are only offered in 3 states.
Car insurance providers that offer coverage to higher-risk drivers are also limited based on state availability.
On the flip side, you have a few states such as California, Hawaii, and Massachusetts that don’t even care to run a credit profile on you.
Clearly, if you live in these states, you are in the clear and don’t need to worry about credit scores when shopping for coverage.
The best advice we can give anyone in this situation is to work with an independent car insurance agent near you.
This is your best chance at comparing rates with dozens of car insurance companies before ultimately deciding who’s going to be your coverage provider.
Not doing so is likely going to cost you a substantial amount on your monthly premiums.
Consider Lower Coverage or Usage Base Car Insurance
Lowering your coverages is a recommendation we would give anyone looking to save money on their car insurance regardless of credit score.
It’s an easy way to get your premiums down.
Especially if you feel like you are a safe driver overall or you have filed no claims in the past.
In these situations, you should feel relatively comfortable lowering your overall coverage amounts.
Often, lowering your coverage closer to legal minimums can save you up to 30% on your premiums overall.
When you combine the ability to lower your coverage in addition to raising your deductible, you have a great chance to make up for the inflated premiums, you will suffer for having bad credit.
Consider raising your deductible to something such as 1,000.00 or 2,000.
Your deductible is nothing more than the amount you pay out of pocket when you file a claim.
Of course, if something does happen, it won’t be much fun dealing with the higher deductible, but you must consider cutting corners where you can until you can establish a better credit score.
As far as coverages, consider lowering the amount of coverage provided for your main and primary protection, such as collision, comprehensive, and liability.
By law, each state has set minimums you need to carry.
Outside of these minimums, most car insurance companies will allow you to make changes in order to lower your premiums.
Why Do Car Insurance Companies Use Credit Scores?
Most consumers are likely frustrated that car insurance companies even look at your credit in order to determine your rates.
It may seem unfair, but, in all reality, the insurance company is simply trying to obtain as much data about you and your overall risk profile as possible.
When they collect enough data, they can use it with the data they have collected over the years to help them determine the likelihood of you filing a claim in the future.
It’s the same assessment you would undergo applying for other lines of insurance, such as life insurance.
Without effective underwriting and considering all factors, it would be difficult for the insurance company to understand when and how likely accidents and claims would occur.
Ultimately, the insurance companies completing these checks and doing their due diligence is what protects all loyal policyholders.
If they didn’t do this, claims would be much higher, and eventually, an insurance company can run out of money with ineffective underwriting protocols.
As far as your credit score goes, it’s been known that individuals with poor credit are often considered individuals who would be deemed riskier.
This, in turn, is what causes your premiums to be inflated for the insurance company to cover the potential for loss in the future.
Other Methods to Save On Car Insurance
Let’s assume that you don’t have excellent state availability for a few of the company options listed above, and you have already implemented a few of the other savings techniques.
In addition to those methods, you can also consider other avenues to save on your car insurance, depending on your circumstances.
One way to do so quickly would be switching to usage-based car insurance.
A few companies such as Metro Mile and Root Insurance can save you a substantial percentage on your car insurance if you drive a low number of annual miles.
You can read our full Metro Mile review here.
You can read our full Root Insurance review here.
Begin Improving Your Situation
Once you have been hit with the bad credit plague, you always have the option to stop ignoring the issue.
Begin repairing your credit so that shopping for basic required coverages such as auto insurance becomes easier in the future.
Plenty of free credit score platforms are available online, and you are also allowed (by law) to obtain your official credit report from all three credit bureaus every 12 months.
Find out what’s placing negative remarks on your file and begin repairing the problem.
This could mean paying down some debt, eliminating outstanding debts in collections, or simply laying off the credit cards.
Shockingly, a few payments and a small amount of effort can add up big time on a credit report.
If you started today, you likely could begin shopping for better car insurance rates after 6 months-12 months.
Final Thoughts
Bad credit can really handcuff you from doing several things.
Purchasing a home, starting a business, and yes, even getting the best rates on car insurance.
However, car insurance companies are aware of this, and some companies specialize in offering coverage for consumers just like you.
Compare rates with several options to get the best price and coverage and begin repairing your credit score in the meantime.
Best of luck.
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