High Performance Car Insurance Premium
I’d like to talk for a minute about the issue of credit reports being used to determine someone’s high performance car insurance premium. I don’t have statistics for this, but I would wager a guess that if you own a high performance vehicle, then your credit score probably ain’t all that bad. In fact, if you have a good credit score, the incorporation of credit scores into the premium determination process can do you a huge favor, especially when you have other high risk factors working against you. There are also plenty of high performance car owners who don’t have great credit scores, though.
A lot of the controversy over using credit scores to determine the high performance car insurance premium rate for a person is that it disproportionately affected minority and low income Americans, and was targeted as an issue of discrimination. Critics said that the use of credit reports to determine car insurance rates made the accessibility by urban, minority, and low income Americans very difficult. However, the Federal Trade Administration studied the phenomenon, and after a few years released a report stating that the use of credit scores was actually a pretty accurate way to determine how many claims a person would file, and affected people of all groups who had bad credit scores in the same way.
In Texas, there was even more extensive research done, this categorized by race. However, the findings showed that although minorities were more adversely affected by the use of credit scores for their high performance car insurance premium ratings, these credit reports had very steady correlation with the amount of claims a person filed, and thus it was a good way to determine risk.
Because of the release of these studies, it seems that the use of credit reports in premium determination is here to stay, at least in most states. Some states have suggested the proper way to fix the disparity in car insurance premiums between people with good credit reports and those with bad ones is to make sure that people are properly educated about credit scores and credit reports. There are a lot of people in the U.S. who simply do not understand how the system works concerning credit scores, and this ignorance causes a lot of problems for many people. However, even education about credit reports will not do much to the fact that a good number of the people who have bad credit reports and bad credit scores are in the position that they are in because of lack of health insurance and sudden health catastrophes.
If you are in the situation of having a bad credit report and having a high performance car insurance premium that is too high for you to be able to handle, though, you shouldn’t think that you have to go without car insurance. Even in states with the highest average premium, it is possible to lower your payment to a decent amount. Follow the usual steps for getting cheap high performance auto insurance premium rates and, in the meantime, begin th slow process of rebuilding your credit report.
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