SSN check for car insurance - WHY ?

Question

I have received a number of answers for the question. It seems that in a number of cases the quote that's received depends on how good or bad your credit is. What's the difference if someone has bad credit, as long as he's a good driver? Insurance premiums are paid in advance so why the credit check ?

Answer 1

It has nothing to do with your ability to pay.

The insurance companies have found that there is a co-relation between credit and the possibility of having claims in the future. People with bad credit tend to put in more claims so your premium is partially based on your score. They use their own scoring system and they weigh the parts of your credit history different than banks or other lending institutions. The University of Texas didn't agree with this, so they did a big study several years ago to disprove the theory. They couldn't.

Answer 2

Well, the difference is, people with lower credit scores have more claims, and more paid OUT on claims.  Which translates to, lower credit = worse claims history.

If you want some more information, I would check out...

http://www.surveyland.org/jump.php?link=...

Take care.

Answer 3

If you have bad credit,  how likely is it you will pay your ins premiums on time???   Your track  record might indicate "no."

   Ins premiums are due by a certain date, if not paid your policy will lapse. No one, not you, the ins co, or the bank,, want to get into that kind of situation.

Answer 4

to make sure you wont s***w the insurance company over its different when you apply for a quote. your credit score depends on how well a business will approach your qualifications. but now there are alot of businesses who do not care about credit history but some of those businesses are under the watchful eye of the BBB (better business bureau) but its all confusing it makes no since but credit history is important no matter if you paid for your premium or w/e that past is still there and is not erased.