Car insurance secrets revealed

You probably think the cost of car insurance depends mostly on your driving record. But increasingly, car insurers also include other factors that have nothing to do with driving. Consumer Reports found that prices can increase dramatically because of your credit history.

Car insurance commercials tout low rates but don't tell you just how the companies set those rates. Consumer Reports' two-year investigation found that many major insurance companies base prices in part on a hidden credit score that can take into account things like what type of credit card you have or whether you've applied for credit recently.

Margot Gilman, Consumer Reports: "That car insurance credit score is different from your FICO score, and how it figures into your premiums varies depending on the insurer and your state. Companies use it to predict not if you'll be a good driver but whether you'll file a claim."

Consumer Reports compared rates for hypothetical drivers who are single with clean driving records.

In Florida, the average annual premium for those with an excellent car insurance credit score is about $1400. With just a "good" score, it is more than $1700, and with a poor score, more than $3800. That's a much higher premium than for those with an excellent score and a drunk-driving conviction.

Consumer Reports research shows that some insurers penalize you more for a poor credit score than others. For those drivers in Florida with a poor score, Amica Mutual charges $7200, but Geico charges $2300. So Geico is a better choice if you have a poor score in Florida.

A few states prohibit insurers from setting prices based on credit scores - California, Massachusetts, and Hawaii. Gilman explains, "Insurance premiums in those three states are based much more on how people actually drive, which we think is much more fair. But it does mean that if you have an accident in those states, your rates could go up higher than elsewhere."

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