Customers with no credit can pay up to 113% more on auto insurance. (Photo: Shutterstock)
Is there a connection between credit scores and auto insurance? According to WalletHub’s research, there is.
Related: Top 5 states for car insurance savings
In its 2017 Auto Insurance & Credit Score Report, WalletHub compared the cost of policies in all 50 states and the District of Columbia from five of the largest auto insurance companies in the U.S. for a pair of hypothetical applicants who are identical save for their credit standing: One has excellent credit, and the other has no credit. WalletHub also examined how transparent the major car insurance companies are regarding their use of credit data and where they get it.
See the chart below for the exact parameters WalletHub used for its base case driver and auto coverage:
Related: Auto premium increases put strain on insurers’ customer satisfaction
No credit means higher premiums
According to the report, on average people with no credit pay 65% more for auto insurance than people with excellent credit. In Pennsylvania, New Jersey and Michigan, drivers with no credit pay twice as much, with premiums fluctuating 113%, 100% and 105% respectively.
Among the five companies studied (Geico, Progressive, State Farm, Allstate and Farmers Insurance), Farmers seems most reliant on credit data, with those with no credit paying over twice as much (102% more) as excellent-credit customers. Customers with no credit pay on average 40% more with Geico, 55% with Progressive, 58% with State Farm and 79% more with Allstate.
Related: 20 best car insurance companies of 2016 ranked by consumers
On average, the five major auto insurance companies studied use credit data in 90% of the states in which they operate. Progressive uses credit data in all of the states it serves.
The chart below shows how much excellent credit can save customers on auto insurance:
Related: Personal auto policies: 5 questions agents should ask buyers
John is a Jacksonville native who grew up on the First Coast. He graduated from Bishop Kenny High School in 1975 and went to college at Florida State University where he completed a 4-year program in 3 years. John graduated from the Florida State University College of Business in 1978 and went straight into Florida State University College of Law. While in law school, John earned a position on the prestigious Law Review Board serving as its Business Editor. As a law student, John studied in the Oxford program. He also interned with the Florida Legislature working in the Florida House of Representatives Criminal Justice Committee. John was admitted to the Florida Bar in 1981.
John began his legal career as a law school intern in the State Attorney's Office in Jacksonville in 1981. After his internship, legendary State Attorney Ed Austin hired John as a full-time Assistant State Attorney for the Fourth Judicial Circuit (Clay, Duval, and Nassau Counties). As a prosecutor, John tried jury and non-jury trial on charges ranging from DUI to Murder.
In 1983, John moved from the State Attorney's Office to begin his career in private practice. He has practiced law for 30 years on the First Coast. For the last 20 years, John and his family have made Clay County their home.
John limits his practice to personal injury and disability cases. While there are many fine attorneys in Clay County, John is one of only a few Clay County attorneys who limit their practice to personal injury and disability cases. John takes pride in helping clients resolve injury claims in ways that avoid the stress, uncertainty, and the expense of unnecessary litigation.
John is the past President of the Clay County Bar Association and has served on the Board of the Clay County Bar Association from 2009-2013. He is an active member of the Florida Bar, and the Federal Bar of the Middle and Southern Districts of Florida. He is also a member of the American Association of Justice, the Florida Association of Justice, the National Organization of Social Security Claimants' Representatives, and the National Organization of Veterans' Advocates.
Service to the Community
John is involved in the Clay County Community serving as a member and Director of the Rotary Club of Orange Park, of the Clay County Bar Association, and the Putnam County Bar Association.
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