Auto Insurance Companies That Don't Check Your Credit History

Credit scores are a major factor in determining auto insurance rates. Historical data shows that drivers with poor credit file more claims than those with excellent credit, and insurance companies consider these drivers to be high-risk. While most auto insurance companies perform credit checks, there are a few that do not. This includes CURE, Dillo, and Empower. Additionally, some states have banned the use of credit scores in determining insurance rates, including California, Hawaii, and Massachusetts. If you're concerned about your credit score affecting your auto insurance rates, you can consider usage-based insurance or telematics-based insurance, which bases premiums on driving behaviour and mileage rather than credit scores.

Usage-based insurance

There are two basic types of usage-based programs: driving-based and mileage-based. Driving-based programs measure a variety of driving habits, while mileage-based programs only measure how many miles you drive. Both types of programs rely on telematics to gather information about your driving behaviour.

However, it's important to note that not all drivers will get cheaper rates with usage-based insurance. If you frequently engage in aggressive driving behaviours, your insurer may raise your premium. It's also worth considering the privacy implications of sharing your location and driving behaviour with an insurer.

When deciding whether to enrol in a usage-based insurance program, it's important to understand the program's rules and how your driving behaviour will impact your insurance rates. Some programs may also have specific guidelines, such as avoiding driving after midnight or limiting your mileage, to maximize potential savings.

Telematics insurance

Some examples of telematics-based insurance programs include Progressive Snapshot, State Farm Drive Safe and Save, and Nationwide SmartRide. These programs allow insurance companies to more accurately gauge risk and tailor insurance products to specific consumer profiles.

It is worth noting that telematics insurance may not always result in lower insurance rates, especially if you regularly drive long distances or during specific time periods. Additionally, privacy concerns have been raised regarding the collection of driving data, leading some states to enact legislation requiring disclosure of tracking practices and devices.

Overall, telematics insurance offers a unique approach to auto insurance, rewarding safe driving habits and providing an alternative for drivers concerned about the impact of their credit score on their insurance rates.

No-credit-check insurance

Usage-based insurance

Usage-based insurance, also known as pay-per-mile insurance, bases your premium on how much you drive rather than a fixed annual rate. Companies like Root and MetroMile do not check your credit score. Even more traditional insurance companies that do consider credit may still offer lower rates if your vehicle usage is low.

Telematics insurance

Telematics insurance tracks your driving habits, like average speed and braking, to determine your premium. While it may not always circumvent a credit check, it can provide more affordable rates for those with consistently safe driving habits.

State-specific options

Some states have banned or limited the use of credit scores for setting policy rates, including California, Hawaii, Maryland, Massachusetts, Michigan, Oregon, Utah, and Washington. In these states, insurance companies operating within them do not conduct credit checks.

Auto insurance companies that don't check credit scores

A few auto insurance companies do not run credit checks, including:

• CURE (Citizens United Reciprocal Exchange) - currently offers insurance in Michigan, New Jersey, and Pennsylvania
• Dillo Insurance - provides insurance in Texas
• Empower Insurance - offers insurance in Texas with some policies that don't use credit scores

Pay-per-mile insurance

With pay-per-mile insurance, you pay a base rate and then a per-mile rate for the miles you drive each month. The base rate is calculated using standard insurance factors such as your age, driving history, the type of vehicle you drive, and where you live. The per-mile rate will vary depending on these factors and the insurance company. For example, Metromile offers a base rate of $29 per month, with a few cents charged for each mile driven.

There are a few ways that insurance companies track the number of miles driven. Some companies use a small device that plugs into the car's diagnostic port, while others use a mobile app to track mileage. Mile Auto, for instance, requires policyholders to take a photo of their odometer each month.

• Metromile: Available in Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington.
• Mile Auto: Available in Arizona, California, Georgia, Illinois, Ohio, Oregon, Pennsylvania, and Texas.
• Nationwide SmartMiles: Available in Washington, D.C., and 44 states, excluding Alaska, Hawaii, Louisiana, North Carolina, New York, and Oklahoma.
• Allstate Milewise: Available in 21 states, including Arizona, Delaware, Florida, and Illinois.

While pay-per-mile insurance can offer significant savings for low-mileage drivers, it is important to note that it is not available in all states, and the number of companies offering this type of insurance is limited, making it difficult to comparison shop. Additionally, the monthly bill will vary depending on the number of miles driven, which can make budgeting and comparing quotes more challenging.

Non-standard insurance

Non-standard auto insurance is for drivers who are considered high-risk. This includes individuals with poor credit scores, multiple DUI convictions, driving violations, or tickets. Drivers under 25 or over 75 are also considered high-risk.

• Farmers
• Travelers
• Geico
• Allstate
• State Farm
• Progressive
• Erie
• USAA
• Liberty Mutual
• Direct Auto Insurance
• Kemper Auto Insurance
• National General
• Bristol West
• Gainsco
• Acceptance Auto Insurance

Frequently asked questions