Last week in Part 1 of our series, we talked about why it can be so difficult to understand how your insurance rates are calculated. This week, we continue our discussion of auto insurance rates and suggest why your rates may be high, even if you have a clean driving record.

A study conducted by Consumer Reports indicates that credit score can make a huge difference in what you pay for auto insurance. For example, the difference between a driver with excellent credit and good credit on average is about $300 a year. If you have poor credit, you’re paying on average about $2000 more than someone with good credit. Compare that to someone with excellent credit but who has a drunk driving conviction (this example is from someone in Florida). The person with excellent credit and a DWI was paying around $1600 less than the person with poor credit. This indicates that credit score is a bigger determiner in your car insurance rate than is a drunk driving conviction!

The only states that prohibit the using of credit scores in determining car insurance rates are California, Hawaii, and Massachusetts. In these three states, car insurance rates are primarily based on driving history. As a result, getting into an accident in CA, HI, or MA means you’re facing a much higher spike in insurance rates than other states where your credit score predicted whether or not you’ll be a safe driver.

Stay tuned next week when we discuss what an auto glass repair or replacement will do to your insurance rates.