Is there a connection between credit scores and auto insurance?According to WalletHub’s research, there is.

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Related: Top 5 states for car insurancesavings

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In its 2017 Auto Insurance & Credit Score Report,WalletHub compared the cost of policies in all 50 states and theDistrict of Columbia from five of the largest auto insurancecompanies in the U.S. for a pair of hypothetical applicants who areidentical save for their credit standing: One has excellent credit,and the other has no credit. WalletHub also examined howtransparent the major car insurance companies are regarding theiruse of credit data and where they get it.

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See the chart below for the exact parameters WalletHub used forits base case driver and auto coverage:

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Related: Auto premium increases put strain on insurers'customer satisfaction

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(Photo: Shutterstock)

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No credit means higher premiums


According to the report, on average people with no credit pay 65%more for auto insurance than people with excellent credit. InPennsylvania, New Jersey and Michigan, drivers with no credit paytwice as much, with premiums fluctuating 113%, 100% and 105%respectively.

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Among the five companies studied (Geico, Progressive, StateFarm, Allstate and Farmers Insurance), Farmers seems most relianton credit data, with those with no credit paying over twice as much(102% more) as excellent-credit customers. Customers with no creditpay on average 40% more with Geico, 55% with Progressive, 58% withState Farm and 79% more with Allstate.

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Related: 20 best car insurance companies of 2016 ranked byconsumers

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On average, the five major auto insurance companies studied usecredit data in 90% of the states in which they operate. Progressiveuses credit data in all of the states it serves.

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The chart below shows how much excellent credit can savecustomers on auto insurance:

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Related: Personal auto policies: 5 questions agents shouldask buyers

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