California Car Insurance California Department Of Insurance
Welcome California Car Insurance consumers. We understand the concerns that you have trying to get insurance when you have had a few tickets or accidents or even some credit problems that may put you and your family in need of a different Insurance Policy with coverages that may need to adjusted up or down. This website will help you locate the appropriate free low cost auto insurance rate quote online
that you need regardless of what insurance record you have had. California Certified Producer Agents are available to help you.
Research California Free Car Insurance Quote Options Below.
About California Car Insurance Credit Scoring
Credit Scoring
Ever applied for a car loan, a home loan or mortgage, or a credit card? If so, you know that how you manage your credit is very important to obtaining any of these items.
After many years of study and analysis, several insurance companies have found that when evaluating insurance applications or policies a connection exists between how you manage your credit and your risk of loss. Insurers have used this correlation to create a credit-based "insurance score." This score can help a company to evaluate the likelihood of an individual filing a claim.
It is important, however, to understand that an insurance score is not the same as a credit score. Both are derived from information found in your credit report, but they predict very different things. Insurers consider credit information differently than banks and lending institutions. Banks use credit scores to determine an applicant's ability to repay a loan, while insurers use information from a credit report to generate
an "insurance score."
Previous experience has determined that the way you handle your credit is a good indicator of how financially responsible you are. Studies have also shown that those who are responsible in the handling of their financial matters will take fewer risks that could lead to an insurance loss. It is from this score that insurers are able to predict the probability of future losses. An insurance score uses information from your
credit report to predict how often you are likely to file a claim, and/or how expensive that claim will be.
Credit-based insurance scoring is very beneficial to insurance consumers. Insurance companies want to reward their customers who have been responsible with their credit by offering them insurance products at the lowest and best rate possible.
Insurance scores are a way of measuring risk based on your credit history. Research shows that people who manage their personal finances, such as whether you've made timely payments, the number of open credit card accounts you have, and whether you've filed for bankruptcy also manage other important aspects of their life.
Credit-based insurance scores are "blind" and objective. Insurance scores NEVER factor in information about one's income, race or where a person lives.
Insurance scores measure "how," not "how much." They are a snapshot of how well you manage your assets, not how much wealth you have accumulated. A person of moderate means is just as likely to benefit from having a good insurance score as a wealthier individual.
Your insurance agent and company only see the computer-generated score - the specific information contained in your credit report remains private.
Credit-based insurance scoring helps to make insurance pricing more accurate. People less likely to have a loss in the future pay less; those more likely to have losses pay more. Combined with familiar factors such as the age of your home, insurance scores are another way for insurers to differentiate between lower and higher insurance risks.
The use of credit-based insurance scoring promotes competition. Since most insurance companies use credit information in different ways, rates can vary giving consumers more choices. In fact, some insurance companies choose not to use credit information at all.
The use of credit-based insurance scoring should not be a secret. Every existing and potential policyholder deserves to know if and how a company uses credit information. If you don't feel your agent or company is telling you what you need to know, shop around for another agent or company that will.
Consumers are legally entitled to see what is in their credit report; they also have the right to have the credit reporting company correct or remove any information that is not accurate. Because insurance scores are based on patterns of financial management, an individual error is not likely to have a large impact. Insurance companies will reevaluate and recalculate premiums if a consumer finds an error, has it corrected by
the credit reporting company, and then advises their insurance company or agent.
In the past two years, more than two dozen state legislatures considered bills to ban or severely restrict the use of credit-based insurance scores. When presented with all of the facts about insurance scores, most states took no action on these proposals. A few states enacted laws that require insurers to disclose the use of such scores and prohibit policy cancellation or non-renewal based solely on insurance scores.
Insurers, for the most part, supported these proposals.
California Credit Scoring