Will my credit rating change my insurance rates?

by jasong February 2, 2017

I was recently asked this question by one of our Graybeal Group, Inc. clients, and thought I would share the answer here for our readers.

There are a lot of things that go into homeowners and auto insurance rates, one of them being credit. I’ve heard a lot of complaints from people who don’t like the fact that insurance companies use credit in their underwriting.

Some people have absolutely no idea that it’s used in the rate at all.

At the end of the day, there’s not much we can do about it though. Insurance companies have been using credit in their rates for decades, and that’s not likely to change.

By the way, insurance companies don’t pull your credit like a mortgage company or credit card company does. There is no negative impact on your credit as a result of an insurance company looking at it.

When I say “pull” what I mean is that the insurance company is doing what’s called a soft inquiry, which is not the same thing as having your credit pulled (hard inquiry).

When does credit play a role in insurance rates?
It’s important to understand that insurance companies don’t continuously check or monitor your credit. Usually, they only check it when you first get a quote and/or sign up with them in the very beginning.

This means that if your credit score increases (or decreases) your insurance company does not automatically know about it.

So, to my customers question of whether or not his increased credit score will lower his rates, the answer is not automatically.

What has to be done on our side as the agent is contact the carrier the insurance and ask them to do what’s commonly referred to as a “re-score”. This is when the insurance company can re-run the person’s credit (soft inquiry) to see if there is any positive bearing on the rate.

This isn’t something that the insurance company is going to let the agency do every single year, so it’s not worth even asking unless there has been a significant change in your credit score, and only you as the customer would know if that was the case.

If you’d like to get a better handle on your credit rating, it could be helpful to setup credit monitoring. We hope this was helpful! As always, leave us comment below if you have any questions.

Graybeal Group, Inc. Offers A Wide Range of Products and Pricing

Graybeal Group Inc. is a professional Insurance company with licensed agents and staff. With over three decades of experience, Graybeal Group takes pride that our agents are specialized in the needs of our customers in the areas of Crop/Agriculture, Hemp, Non-Profits, Pasture Rangeland and Forage, and Farm & Ranch.

Being able to provide the time for our agents to focus on their specialty allows us to give you – our clients – the needed coverage for your home and business.

For more information, we invite you to call Graybeal Group Inc. at (541) 567-5523.

Why Do My Auto Insurance Rates Keep Going Up Even Though My Car Keeps Getting Older?

by jasong February 2, 2017

Why do my auto insurance rates keep going up even though my car is getting older? At Graybeal Group, Inc., many of our clients ask this question so I would like to address it from a couple of angles.

First things first, even though it’s called car/auto insurance, it covers more than just your car. It should technically be called “auto-owners” insurance, similarly to how home insurance is actually called “homeowners insurance”.

It’s important to understand that there are a lot of variables that go into insurance premiums, and with auto insurance, it’s no different.

The insurance company is much more concerned with you crashing into someone and causing them (or yourself) bodily harm, or death than they are about your car. A car is a material possession that can be replaced.

Human life is not.

When is the last time you looked at your auto insurance policy?
If you look at it you’ll notice there are a lot of different coverages on your auto policy.

Bodily injury
Property damage
Un-insured motorist
Under-insured motorist
Medical Payments
Loss of Income
Funeral Expense
Loss of use
Rental Reimbursement

These are all things that you are covered for on your auto policy. How many of them have to do with your car?

None.

How many of them have a price next to them on your policy?

All of them.

Your car isn’t the only thing you’re being charged for on your policy
That’s because auto insurance covers far more important things than your car as mentioned above.

Let me re-phrase that: your car insurance rate isn’t just based on your car.

You’re not the only one…
It’s also important to understand that you are not the only person your insurance company insures. You are one fish in an ocean of other fish, sharks, and sea creatures, all of who have different characteristics and risk profiles.

Insurance is all about spreading costs over a large number (risk pool) of people, which each person paying their fare share. That risk pool is constantly changing and is impacted by a ton of different things, including the overall economic climate.

This means that you are sharing in the cost of millions of other people, many of whom may have poor loss history and/or credit.

That’s what insurance is though — sharing in the cost.

The next time your auto insurance rates go up, take a look at the big picture. Make sure you’re looking at ALL of the coverages, and corresponding rates.

Hope this helps! If you would like to know more about Car Insurance be sure to visit our page dedicated to it.

Graybeal Group, Inc. Offers A Wide Range of Products and Pricing

Being able to provide the time for our agents to focus on their specialty allows us to give you – our clients – the needed coverage for your home and business.

For more information, we invite you to call Graybeal Group Inc. at (541) 567-5523.