QuestionQUESTION: After a bitter divorce, and a losing battle with medical bills, my credit is trashed. Insurance companies now use credit reports as a huge factor in determining rates. I was also a bad boy and did get a speeding ticket last year (I'm 49 years old and wasn't drag racing or anything, just not paying attention). Would My (new)wife and I have a better chance of finding lower costing auto and home owners insurance if we listed her as primary? Thank you for any advice.
ANSWER: Hi Michael,
I know of no company that uses your credit rating in determining rates. As a matter of fact, I know of no company that runs a full credit report. Most companies tie into a service that provides them with your "CREDIT SCORE" which the company then uses to determine if they want the policy paid in full up front or allow a down payment
(which is a % of your total policy) and can vary depending on your credit score. Your credit score also determines if they will offer
you monthly payments after the down payment or demand that the policy be paid in full within 60 days.
You didn't mention your state of residence, but in many states there is a higher price if one of the drivers has a citation. In most cases. This is a fairly small amount but would apply even if you listed your wife as the primary driver. Of course, you do realize that if you list your wife as the primary driver when in reality you are the primary driver that you are guilty of committing insurance fraud which would allow the company to deny the claim and cancel your policy.
A homeowners policy must be written showing the insureds exactly as
listed on the deed or mortgage. There is no way to make your wife primary.
I hope that you find this information useful. Your feedback by rating my response will be appreciated.
Sincerely,
Bennie
San Francisco Bay Area
---------- FOLLOW-UP ----------
QUESTION: I live in Wisconsin, and at least on the homeowners our agent told us our credit rating is why our rates went up. She says her company sees poor credit as a risk, perhaps more desperate people may file false claims.
I am retired military, my wife stays at home with me so it's realy 50/50 down the line on our auto use, although she has her own car where she is driving more. Thank you for your fast reply, it was helpful.
AnswerHi Michael,
Since your car is not used for commute, it doesn't mater which driver is listed as primary, but I don't think changing your wife to primary would create a rate reduction. The company is still going to charge more due to your citation.
In many states, each company is able to determine each and every
item that they use in their rate making process. That might be the situation in Wisconsin and different companies will look at different
factors and the amount of weight placed on each factor.
When you ask the question, you clicked on personal insurance and then clicked on auto claims to ask your question. Under personal insurance there are 5 different categories for you to choose from. I
want you to go back to that site and click on "Insurance Law" and
present the exact same question to an expert named Denise. She is
an agent in Wisconsin and more knowledgeable about how companies
function in Wisconsin since that is her home state. She will know if
every company uses your credit rating as a factor. If not, she can
give you the names of other companies to check out their rate.
All the experts on the personal insurance board have a stronger knowledge of the rules, regulations and laws of the states where they do business.
Good luck,
Bennie
