Study: Poor Credit Drives up Insurance Costs Featured
13 July 2017
A new study by WalletHub shows how credit data affects the cost of insurance policies in each of the 50 states and the District of Columbia.WalletHub compared the cost of policies from five of the country’s largest auto insurance companies for a pair of hypothetical applicants who are identical save for their credit standing. One has excellent credit, and the other has no credit. The five insurers were: Geico, Progressive, State Farm, Allstate and Farmers Insurance.People with no credit pay 65 percent more on average for car insurance than people with excellent credit. Drivers with no credit pay at least twice as much in Pennsylvania, New Jersey and Michigan.Farmers Insurance seems most reliant on credit data, with credit newcomers paying over twice as much as excellent-credit customers. Even Geico (least reliant) has a 40 percent penalty.The five major auto insurance companies use credit data in 90% of the states in which they operate, on average. Only Progressive uses credit data in all of the states it serves.