LAS VEGAS - nvtip -- Many auto insurance companies use a credit insurance risk score to determine how likely you are to cost them more. Some refer to it as "soft hit", also called "credit based scoring". This is NOT the same as a credit score used by lending institutions.

How Auto Insurance Companies Rate You

Each auto insurance company will use their own factors to determine rate. The reason a "credit based scoring system" is used is because the auto insurance companies understand risk better than most. To them, individuals that are more established, live their life responsibly and without risky behaviors and have years of good credit history, usually will have a lower overall "claims" risk. The people who have been responsible and paying their bills on time and have higher credit scores tend to have few were insurance claims, and carry more insurance coverage, more so than those that don't have these factors.

Most auto insurance companies in NV do use some form of credit based scoring to determine rate, along with many other factors. There are a few insurance companies that do not. Some states do not allow this check. Others do. Nevada does. This credit based scoring does play a factor with your auto insurance rate that is determined in "underwriting". An insurance company's underwriting department looks at prior auto accidents and claims, along with a DMV check.The department of motor vehicles report looks for tickets you've had in the past as well as your driving history. All these factors can all play into your actual price. Sometimes having the state minimum liability insurance also plays a factor. If you carry the bare bones state minimum as opposed to a larger liability, for example: 25/50/25 versus 250/500/250, this is not helpful if you are looking to keep your insurance rates low as this may be considered a higher risk behavior. Overall you pay less for the 25/50/25 because it is less coverage, but overall "risk" is factored.

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Nevada Insurance Enrollment
4260 W. Craig Road suite #150-A
North Las Vegas, NV 89032
(702) 898-0554
Website: NevadaInsuranceEnrollment.com