Insurance ScoreNorth Carolina mandates that if you own and operate a vehicle you must carry at least the minimum limits of liability auto insurance as required by the State. However, trying to find the coverage you need may not be as affordable as you think because of your insurance score. Before you shop around for the best N.C. auto insurance rate, find out the effect your insurance score may have on your N.C. insurance premium.

What is an Insurance Score Versus a Credit Score? 

Many people may use these terms interchangeably but they mean different things. Similarly, both have an impact on your N.C. insurance premium rates, but an insurance score is a score proposed to predict the likelihood of future claims/accidents and from there assigns a risk factor to you. However, a credit score is used as a predictor of your paying bills/credit on time and keeping credit at a diminished rate.

Higher Risk, Higher Premium

If you have multiple credit cards with significant balances, have a history of being late on your utility bills, have defaulted on a car loan, had a house repossessed, or filed bankruptcy, then you can be assured that both your credit score and insurance score will negatively impact your insurance premium rate. N.C. insurance carriers realize that the past is the biggest mirror into your future when it comes to financial standings so they want to look at the type of risk you are when deciding whether to insure you and if so, for what amount.

Factors Used by N.C. Insurance Carriers to Calculate Your Auto Insurance Rate 

When looking for auto insurance rates, you may think that your premium quoted is merely based on the type of car you are insuring or your age, but it is more involved than that. Below are some common considerations taken into account when your insurance rate is calculated:

Auto Claim History- If you have a background of filing numerous auto insurance claims, then this is a red flag that if history repeats, you will continue to do so in the future.

Car Accident History- Again, if you have a history of having multiple car accidents, you will be considered a higher risk, thus given a higher insurance premium quote than someone who has little to no history of auto accidents. Incident reports, offenses, tickets, collisions, etc. will negatively impact your risk factor and thus, premium rate. 

Credit History- This type of information is available to your N.C. auto insurers and they do take into account your credit score, any defaults on loans, late payments on bills, and number of credit cards along with balances, to name a few.

Although all the above information is used when determining your auto insurance rate, you can do things to improve your insurance score/credit score in an effort to obtain the type of N.C. auto insurance you need at an affordable rate to you.

  • Devise a spending/savings plan that focuses on reducing your credit card debt
  • Pay your bills on time
  • Avoid using credit cards unless absolutely necessary

Twin City Insurance understands your need for N.C. auto insurance and is here to assist you in getting the right type of auto insurance coverage you deserve within your budget. Contact us TODAY at 828-464-2643 with any questions you may have concerning your N.C. auto insurance rate or how you can improve your insurance score.