Your credit rating and insurance

 Insurance  Comments Off on Your credit rating and insurance
Feb 222012
 

Most people understand that their credit history has a lot to do with their ability to secure a loan or find a place to live.  But, many are unaware that their credit score can also affect them when purchasing insurance.

When underwriting and setting the rates for insurance policies, insurance companies generate a ranking known as an “insurance score.” This number is based on a person’s credit history.  Insurance companies use credit to determine risk, since numerous studies have revealed that how a person manages his or her financial affairs is a good predictor of the likelihood of insurance claims.  Historically, people who have a poor insurance score are more likely to file a claim.

Once you have been assigned an insurance score, insurers differentiate between lower and higher insurance risks and thus charge a premium equal to the risk they are assuming.  It is for this reason, that we recommend establishing a sound credit history and checking to make certain your credit report is accurate.  The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies – TransUnion, Equifax, and Esperian – provide you with a free copy of your credit report, at your request, every 12 months.  Reports can be ordered from AnnualCreditReport.com.

For more information on how credit can affect your insurance rates, contact your independent, Trusted Choice insurance agent at 401.762.2218.

 

Who needs auto insurance?

 Insurance  Comments Off on Who needs auto insurance?
Feb 072012
 

If you are a driver without adequate insurance coverage, you are potentially exposing yourself to huge financial risks. In the event that you are at fault in an accident, liability insurance covers damages, medical, and legal costs up to the liability limit you have in place.  Once the liability limit has been reached, you will be held responsible for all remaining expenses. Therefore, a lower liability limit may mean lower premiums and payments, but far less coverage if you are involved in an accident.

Some additional levels of protection, which you may want to consider purchasing, are discussed below:

  • Collision covers damage to your own vehicle in an accident.
  • Other-than-Collision covers fire damage to your vehicle, break-ins, vandalism or theft, as well as natural disasters (earthquake, hail, hurricane, flood, etc. – unless the vehicle is overturned, then it is considered a collision).
  • Medical payments’ insurance guarantees emergency and related medical payments, usually in the range of $5,000 to $10,000, for you, your passengers and other parties, regardless of who is at fault. It also covers you and members of your household in any accident involving an automobile, whether you are on foot, in a friend’s car, riding a bicycle, etc.
  • Uninsured motorist (UM) and underinsured motorist (UIM) coverage protects you and your passengers if injured in an accident with drivers carrying insufficient liability coverage.
  • Extra coverages include expenses for towing, labor, temporary replacement vehicles, etc. These are generally defined as add-ons or endorsements to your policy.

For more information on the limits and types of coverage that will best suit your situation, please call the Soucy Agency at 762.2218.