Car insurance is always a complex issue, irrespective of economic conditions and of state; however, a recent study undertaken by a Nevada-based car insurance online platform indicates that Nevada car insurance rates might double, depending on the policyholder’s credit history. The website in question provides free online comparisons between policies and premiums. For the purposes of the analysis at hand, the authors of the research compared some 6,000 car insurance quotes for residents of Nevada. They found that the one differentiating factor between the amount of money policyholders paid for their premiums was their credit history. The difference between those with the best credit and those with the worst had increased the premium rates for those in the latter category by 129 per cent on average.
Why does credit affect Nevada car insurance rates?
This just goes to show that Nevada car insurance rates are one of the segments of the consumer economy affected by the recession, its aftermath and its effects. Though the connection might not be immediately apparent, it looks like car insurance, too, can be affected by various poor credit decisions, which, in time, took their toll on the borrowers’ credit history. This is because auto insurers (and all insurers, in fact) in the state of Nevada price their premiums by calculating insurance scores based on credit. It doesn’t mean that one’s credit score is exactly the same as one’s insurance score, but the two indexes do take certain common factors into account.
The study found that there are two main factors which influence Nevada car insurance scores:
– Going from a good insurance score to an average score – this amounted to a premium increase of 35 per cent on average;
– Going from an average insurance score to a poor one – such deterioration can lead to an average premium increase of as much as 89 per cent.
Some may argue that one’s credit history should have nothing to do with Nevada car insurance rates. However, both driving and personal finance management are closely connected with notions of responsibility. As a matter of fact, there are several studies that show there is a link between how responsible one is with their own money and how much money they eventually come to claim from their auto insurer. This is the reasoning behind basing Nevada’s insurance score on some of the same factors as the policyholder’s credit score.
It’s true that not all Nevada-based car insurers take credit scores into account. However, most of them do. The online comparison portal cited in the beginning aggregates quotes from 21 auto insurance providers. Out of them all, only two disregard credit scores when calculating insurance scores. The rest of them will increase an auto premium after the policyholder experiences a credit score downgrade. As such, when it comes to loans, it’s best to apply the same kind of prudence as when out on the open road. In order to have access to the best Nevada car insurance rates, one has to prove they are responsible as more than just a driver.