Some vehicle insurance companies require higher premiums for bad

Some insurers penalize you more for a poor credit score than others so you have to shop around. Having already reported on factors such as lower credit scores and lower educational levels leading to higher rates for drivers, the nonprofit association on Monday released the results of its research on marital status and insurance rates. In this case, there was no premium imposed by Geico for a widower (Progressive and Farmers did, with the latter slapping a $530 hike in price). With a “good” score, it is $1,631, and for those with a “poor” score it’s $3,426.

All major insurers contacted for this article declined to comment, however James Lynch, the Insurance Information Institute’s chief actuary, told Yahoo Autos that he was surprised the CFA was only now bringing this up, stating insurers have been doing this for some time: “The insurers rely on their own internal data”, Lynch said, “they do not rely on a 2004 study”. Consumer Reports just finished an exhaustive study of more than two billion insurance quotes at companies across the country and found that prices can increase dramatically because of your credit history.

The organization has embarked in an all out war against such practices by the insurers, with attacks in recent months as well against the way insurance companies focus more and more on socioeconomic data, such as a motorist’s credit score, discarding useful factors such as tickets and crashes.

Researchers got online quotes from six of the biggest insurance companies for the minimum amount of liability insurance required by states.

“It’s hard for us to imagine why becoming a widow makes you a worse driver”, Hunter said, suggesting that there is no direct correlation between driving risk and marital status. By varying the marital status of this driver, CFA discovered that most insurance providers charge married drivers less than others. You can get your free credit report at www.annualcreditreport.com.

Consumer Reports used the mathematical pricing formulas that insurers must file with nearly all regulators in nearly every state to help evaluate and compare premiums across the United States.

The report says that since the Great Recession, at least 29 states have adopted a model provision designed to protect policyholders if “extraordinary life circumstances” such as a job loss or divorce damage their credit records. “Now, insurance companies, as all companies, have ability to gather information over a broader scale and analyze it”, he said.

Of course, insurance prices fluctuate.

Your credit score is a number that indicates how likely you are to pay off debts, from credit card bills to mortgages and beyond. “But it can’t be used to downgrade your rating”. Consumers Union of U.S. Inc.

“I don’t think there’s a real groundswell for that”, he says. “Over the past 15 years, insurers have made pricing considerably more complicated and confusing”, the report states.

Spokeswomen for Geico and State Farm had no immediate response for this story, but insurers have argued consumers win when companies compete with differences in the way they price policies. “They look very closely to see what variables will reflect their likelihood to have accidents and adjust rates accordingly”.