Credit scores help determine auto insurance costs in Florida

A driver's credit score helps determine the cost of their auto insurance.Florida legislators are working to decide whether or not the state should end its practice of using a driver’s credit score in order to determine their auto insurance premium.

The auto insurance industry believes a driver’s credit score is directly linked to what their risk will be, said. Research has shown that consumers with lower scores are more apt to file and inflate claims. People with lower credit scores end up either having to pay higher premiums or are denied coverage. Some say not being able to use credit scores to determine risk will only raise costs for everyone, good scores or not.

Those opposed to this practice believe auto insurance companies are already well-equipped with other types of information that can be useful in determining those who qualify for high risk auto insurance, said. Insurers can use age, type of car, gender, driving records, and the area a person lives in. A number of things can cause credit scores to dip, including bankruptcy and divorce. None of these directly affect a person’s driving risk.

Although consumers currently have to pay to learn their credit scores, legislation to make it free will soon be voted on.ADNFCR-3298-ID-19788194-ADNFCR

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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