If you need to buy car insurance, but have bad credit, you may be wondering how you can get affordable coverage. Most businesses rely on credit scores as part of their rate calculations and acceptance criteria; However, it is possible to find auto insurance with no credit check, if you know where to look.
There are two main reasons why you might need “no credit check” auto insurance: First, if you have a few late payments on your credit report, a company that uses credit scoring could raise your rates up to by 25 percent. Second, if you have a bankruptcy, foreclosure, or repossession on your record, the company may refuse to write your policy.
No credit check car insurance is usually available through “high risk” or “non-standard” car insurance companies. These companies are often direct issuers, meaning they work directly with customers rather than relying solely on field agents to sell their policies. They usually offer a toll-free number that you can call to get a quote and purchase a policy. You can also get quotes and buy auto insurance from these companies online.
There are a few things to keep in mind when purchasing a “no credit check” policy through a direct writer. First, some “high risk” companies tend to have very high rates, even if you have a clean driving record. Their rating systems are geared toward insuring people who pose the greatest risks of loss, so their rates are often not comparable to “standard” insurance companies.
Also, some “high risk” companies only offer limited coverage; for example, they may not offer more than the minimum bodily injury and property damage liability limits required by your state. In most cases, these limits are too low to offer you any real protection against a lawsuit if you cause an accident.
If getting “no credit check” auto insurance is your only option, you may end up paying higher-than-average rates for a while. However, as long as you don’t have any claims with your insurance company, you may be able to move to a standard company within a year, even if your credit score is low.