Your Credit Rating Can Affect Your Premiums
What factors do you believe determine insurance rates? If your answer is: At-fault accidents, violations, where you live, property value, and what you drive, you’re right.
You’d also be right if you mentioned other factors such as age, experience, claims history, and prior insurance coverage. But here’s one you may not have guessed: Your credit history. And this is something – unlike age – that you can control.
The credit link
Research firms have found a link between bad credit and increased claim-filing. They also found that individuals with better credit have fewer traffic violations and accidents than those with bad credit.
After looking at data from roughly 1.4 million policies, the Federal Trade Commission (FTC) found insurers paid out almost twice as much for claims made by those with poor credit compared to people with higher scores.
The FTC said that credit scores are predictive of the number and cost of claims filed, and are effective at assessing risk and rates.
Good credit equals lower risk
Customers who pose less risk in all the factors used to calculate premium rates pay lower premiums. The corollary is that high-risk customers pay higher rates. The “credit” factor is similar to any other factor, such as make of car, at-fault accidents, your neighborhood, and your claims history. It will impact your rate.
While it’s unlikely you’ll start making financial decisions based on how they might affect your insurance premiums, it’s important to know how insurance companies establish premium rates.
What you can do
Understanding why credit affects rates can make you more aware of those things that affect your credit score – missed payments, high credit card debt, and even closing a credit card or an account. Controlling these factors can make a difference.
Make your good credit work for you. Not just when you apply for a mortgage, but also when you purchase homeowners insurance.
The Basics of Insuring Your Collector Car
When you begin shopping for collector car insurance, ensure you familiarize yourself with the different coverage types available and the eligibility guidelines. Below is information on the coverage available for your collector car and eligibility guidelines. Ask your insurance professional for details and advice on the best type for you and your car.
Actual cash value: Similar to standard auto insurance, unless you can prove it is an “exception” to depreciation, you’ll receive whatever it would cost to replace the car, less depreciation. If the car is totaled, the most you can hope for is what you paid for it. With actual cash value, you can choose your comprehensive and collision deductibles.
Stated value: The insurer will pay the insurance value you’ve put on it. You’ll need to prove via appraisals that the car is worth your stated amount. This may sound easy and as though it’s the best option, but most insurers won’t agree to full-stated value coverage, and it generally carries a $1,000 deductible.
Agreed value: This is the most common coverage type for collector cars, and refers to values you and your insurer agree upon. There usually isn’t a deductible.
Eligibility: Rating factors used to assess eligibility are those used in standard policies, but some factors are weighted more heavily when applied to antique car insurance. Some policies have monthly mileage limitations, normally about 250 miles. If you drive the vehicle only a couple times a year, or to parades or shows, ask for a lower mileage limit. It may mean a cheaper premium.
For affordable premiums and to maintain eligibility, you need to
- maintain a good driving record
- show a 10-year driving history
- not include on your policy teenage drivers or drivers with poor records
- ensure the vehicle is in a safe place – preferably in a locked area – and parked off-street
- prove another car is used for daily transportation.
Recipe: Picanha (Brazilian Tri-tip Barbecue)
Serves 4 to 6
- 1 tri-tip roast, about 3-4 pounds
- 5 cloves garlic, crushed
- 1/2 cup coarse or rock salt
- 1/4 cup olive oil
If you can’t find tri-tip, look for top sirloin cap. Trim excess fat off the meat. One side will generally be covered in a layer of fat; do not remove it, just trim it down to about 1/8″. Mix the salt and garlic together to make a paste and rub it all over the meat, adding a little olive oil if needed to help it stick. Leave the meat to marinate for at least two hours, turning it occasionally.
Heat the barbecue to the highest setting. When ready to cook, scrape excess salt off the meat and place on hot grill, fat side up. Do not turn over until the first side is nearly burnt. Turn once and check doneness with a meat thermometer; medium should take about 35 to 45 minutes, depending on the meat’s thickness.
Remove from grill and rest five minutes before carving.