Having auto liability insurance is required by law if you own and operate a vehicle in Alabama; however, finding the right type of insurance within an affordable price range may not be as easy as you think depending on several factors, such as your insurance score. Quotes for your liability auto insurance may vary depending on the auto insurers, as might the type of insurance you may receive for that quote. Find out the impact your insurance score has on your Alabama auto insurance premium.
What Your Insurance Score Means
Most people simply obtain a quote(s) for their Alabama auto insurance without necessarily knowing how that rate was attained. Insurance companies look at how much of a “risk” each person is or will be based on the likelihood that person may file a claim or have an auto accident. An insurance score is a numerical ranking based on several considerations that weighs up your particular risk and attaches a premium rate based on that number. Simply put, the higher the risk, the higher the premium.
Credit Score Versus Insurance Score
Both scores have an impact on your auto insurance premium as they both assess risk; however they do so in different ways. While an insurance score predicts the likelihood that someone will have an auto incident or file a claim, the credit score predicts the likelihood that person will pay their bills on time, pay off loans, and be credit worthy. Both are well-calculated methods of predicting the future of someone’s financial stability, credit worthiness, and likelihood of accidents/incidents occurring and both are used as factors in determining your auto insurance premium.
Other Factors that Alabama Insurers Use to Calculate Your Insurance Rate Include, but Not Limited to:
Auto Claim History- The auto insurer looks at your past history of auto claims being filed/number of claims filed and uses that information to predict the future likelihood of filing auto insurance claims.
Auto Accident History- Looking at your past history of auto accidents can help predict the likelihood of future accidents. Someone who has a history of countless auto accidents will most certainly have a higher auto insurance premium rate than someone with little to no accidents.
Credit History- Taking into account past credit incidences such as number of loans secured, dependability on paying them off, late payments, bankruptcy, credit score, number of credit cards, and loan defaults are all ways to assess your particular RISK.
Burkett & Associates Insurance Agency understands your needs to have the right type of Alabama auto insurance and can assist you with any questions you may have regarding your insurance score, how to improve your score, and how to find the most affordable rate for all of your Alabama auto insurance needs. Call us TODAY at 256-704-7400.