Shopping for new auto insurance, does it affect my credit?

[Anonymous]

Hello,

I am looking to switch my car insurance provider. I currently have Progressive and am wondering if there is a more competitive offer. I have been with Progressive for several years.

I have a multicar policy for two older Honda cars, and live in a nice neighborhood, where the cars are garaged.

I have three questions:

1) If I shop around for insurance, e.g. get quotes from different providers, will it affect my credit score? I will be applying for a home loan in the near future, so want to avoid any unnecessary credit inquiries.

2) Can anyone recommend an auto insurer that they are really happy with? I have read that some companies such as:

Amica Insurance
The Travelers Insurance
The Hartford Insurance
USAA Insurance
Kemper Insurance
Educator's Mutual Insurance

3) As a consumer, what is my benefit of calling an insurance broker, as opposed to calling the insurance companies directly. I understand that an insurance broker can provide quotes from multiple companies, but their must be some compromise I make as a consumer?

I really appreciate your help.

Thank you,
oxonian

[Anonymous]

I decided to switch companies early this year and requested quotes from 10 different companies. All were soft pulls with zero impact on credit score. As for calling a broker or company directly? Neither. Just do it online. BTW, when I switched it was to Progressive. They had the lowest quote, followed by USAA and State Farm. 

[Anonymous]

Thank you Captool. I appreciate it.

What is the actual difference between a soft pull and a hard pull? I hear the term all the time, and sometimes those that pull credit can misguide the consumer about the effects of the pull.

Does a soft pull actually have no effect on the credit score?

If I search for insurance quotes online with 5 different insurance companies, does that mean I will have 5 soft pulls on my credit report?

Thank you!

Oxonian

[Anonymous]

A hard pull shows in your credit file when creditors pull it, and can have an impact, (although usually small), on score. A soft pull is hidden from creditors and has no impact on score.

If I search for insurance quotes online with 5 different insurance companies, does that mean I will have 5 soft pulls on my credit report?

Yes, but it won't matter. I have dozens of soft pulls in my reports.

One other thing to note is that credit score has a significant impact on rates. My quote from Progressive was the lowest by a big margin because they pulled TU and it's my clean file.

[Thomas_Thumb]

Many insurance companies use credit based insurance scores (CBIS) as a component in determining premiums. The dominant CBIS is from LexisNexis and they pull from Equifax.

Many insurance companies look at CBIS as a factor but quite a few do not. Also TU provides CBIS independent of LN so companies that use TU CBIS will pull from TU. If you have marginal CBIS, ask if your potential insurer uses CBIS. Note also that 3 states do not allow CBIS as a factor in setting premiums - CA is one of the three.

[elim]

USAA beat my old progressive policy by 50%.  then offered me a CC and auto loan.   Happy so far.     :]

[Anonymous]

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@elim wrote:

USAA beat my old progressive policy by 50%.  then offered me a CC and auto loan.   Happy so far.     :]

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I would be with USAA if they pulled TU.

[elim]

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@Anonymous wrote:

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@elim wrote:

USAA beat my old progressive policy by 50%.  then offered me a CC and auto loan.   Happy so far.     :]

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I would be with USAA if they pulled TU.

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  yeah... they probably pulled your EQ just for typing that 

[Anonymous]

Thank you friends.

Based on this advice, it seems ok to go ahead and check insurance rates with a few different providers, without affecting the credit score.

Is this any way I can find out my credit based insurance scores (CBIS)?

Thank you,

Oxonian

[CreditDunce]

Consumer Reports had a good intro to how insurance rates are set.  They also talk about some of the major insurance companies.  The following thread has the links to their website:

http://ficoforums.myfico.com/t5/Credit-in-the-News/CR-Car-insurance-report/td-p/4282734