No-credit-check car insurance companies are rare, since it’s estimated that 95% of insurers use credit to calculate premiums where allowed by state law. Examples of car insurance companies that don’t check credit include Dillo Insurance in Texas, Equity Insurance in Oklahoma, and Cure Auto Insurance in Pennsylvania and New Jersey. No-credit-check car insurance companies tend to be relatively small and operate at the regional or local level. Because their customer base is mostly high-risk drivers, they are also likely to be more expensive than companies that check credit.
It’s important to note that some companies will not require your Social Security number for an initial quote. Other companies will require an SSN right away. Regardless, most companies will check your credit history after providing an initial quote and adjust the estimate accordingly. If a company gives you the option of providing your SSN for an initial quote, it’s a signal that they will check your credit history later.
Credit’s influence on your premium varies by state and insurance company. For instance, laws in California, Massachusetts, Michigan, and Hawaii prevent insurance companies from taking credit scores into account. Some other states, like Washington, forbid insurers from denying a customer based only on credit history. You can contact your state’s insurance department to request up-to-date information on state car insurance laws and no-credit-check car insurance companies.
Tips for Getting Car Insurance With Poor or Limited Credit
The best tactic if you’re looking for insurance with questionable credit is to compare quotes, as credit history is only one of the many factors that insurers may use to calculate premiums. Insurance companies also consider driving history, ZIP code, and demographic information in states that allow it. Shopping around for car insurance won’t hurt your credit further, either, as insurance companies do not use a hard credit inquiry to generate quotes or set your premium.
When shopping around, give some serious consideration to usage-based insurance because the price is based mostly on your driving habits, rather than anything a credit check might turn up. Companies like Root Insurance and Metromile base premium prices entirely on usage, for example. Similarly, some large insurers like Progressive have usage-based programs that could lead to a discount based on how often and how safely you drive. However, Progressive and other large companies will still factor your credit history into the original premium.
Another option for drivers with poor credit is nonstandard insurance, which caters to drivers considered “high-risk” by insurers. Most major insurers have nonstandard subsidiaries, and some specialty companies like The General focus mainly on high-risk drivers. Coverage may not be cheap, but at least you’ll be able to drive legally.