Which Insurance Companies Don’t Use Credit History?

When it comes to getting the best insurance rates, many factors have an effect — including your credit. In fact, insurance companies that don’t use credit history are few and far between.

Unless you’re in one of the five states that ban insurance companies from using applicants’ credit history in their quote process (California, Hawaii, Maryland, Michigan, and Massachusetts), your credit will likely factor into your car insurance quotes.¹

However, drivers with no credit or poor credit can take advantage of telematics or usage-based car insurance to get insurance and save.

Here’s what you need to know.

Why do insurance companies check credit scores?

Insurance companies can accurately predict how likely you are to file claims by analyzing your financial history, according to the Insurance Information Institute.² After analyzing an applicant’s financial history, insurance companies create an insurance score, which indicates risk. Depending on the insurance company, your insurance score is based either partially or entirely on your credit.

A few states ban this practice completely: California, Hawaii, Maryland, Michigan, and Massachusetts. Other states have partial bans restricting how insurance companies can use credit history, like Oregon, which doesn’t allow companies to cancel or refuse a policy because of an applicant’s credit.

How to get car insurance without a credit check

While most insurance companies default to credit checks when determining car insurance rates, there are still ways to get insurance without it. One way is to find a UBI policy, which bases your premium on how much you drive instead of a fixed monthly price. Hugo Insurance is one company that uses this model.

Other companies offer telematics programs that track your driving habits. Insurance companies can then offer safe driving discounts or rewards based on the collected driving data.

7 insurance companies that offer telematics programs

While car insurance companies can still use your credit with a telematics program, it can help reduce your costs. One study by the Insurance Research Council found that most people who enroll in a telematics driving program save on car insurance.³

If you’re looking for ways to offset poor credit when shopping for car insurance, here are a few companies that offer telematics programs to keep in mind.

1. Allstate: Drivewise

Average monthly premium: $163 full coverage, $86 liability only

Allstate offers safe driving discounts through its telematics program called Drivewise.⁴ This program offers easy enrollment through a mobile app that tracks speed, braking events, and other indicators of safe driving. You receive a policy discount for enrolling in Drivewise, plus fresh rewards every six months based on your driving habits.

2. Nationwide: SmartRide and SmartMiles

Average monthly premium: $144 full coverage, $65 liability only

Nationwide offers two telematics programs: SmartRide and SmartMiles.^{5 6} SmartRide tracks driving habits and provides an initial discount of 15% for signing up, plus up to 40% off over time for safe driving. SmartMiles is for people who drive less than average. Rates consist of a fixed base rate plus a variable rate according to how many miles you put on your car each month.

3. GEICO: DriveEasy

Average monthly premium: $165 full coverage, $118 liability only

With GEICO’s DriveEasy program, you can download a mobile app that monitors your driving behaviors to determine personalized insurance rates.⁷ DriveEasy monitors behaviors like distracted driving, hard braking, smoothness, distance driven, time of day, weather, and more. The mobile app shows you your score over time, which makes it easy to see if the program is helping your rates or not.

4. Progressive: Snapshot

Average monthly premium: $203 full coverage, $126 liability only

Progressive’s Snapshot program monitors driving behaviors to reward safe drivers with lower insurance rates.⁸ While some people can see their rates rise for unsafe driving, this isn’t typical. According to Progressive, only 2 out of 10 drivers see their rates increase. Drivers who save see an average of $231 yearly off their premiums.

5. Liberty Mutual: RightTrack

Average monthly premium: $274 full coverage, $205 liability only

With Liberty Mutual’s RightTrack program, drivers who enroll receive a 10% policy discount instantly.⁹ After using the program to monitor your driving behaviors for 90 days, you can receive additional savings of up to 30% off your premiums. However, if the discount you receive after completing the RightTrack program is less than the initial 10% discount, you'll pay the difference.

6. State Farm: Drive Safe & Save and Steer Clear

Average monthly premium: $175 full coverage, $89 liability only

State Farm offers a few telematics programs. With Drive Safe & Save, you use a mobile app and Bluetooth device to monitor driving behaviors like quick acceleration, hard braking, speeding, distracted driving, and fast turns.¹⁰ For young adults and teen drivers, State Farm offers the Steer Clear program.¹¹ Drivers younger than 25 can save on insurance by completing training courses and driving safely.

7. USAA: SafePilot

Average monthly premium: $115 full coverage, $60 liability only

The USAA SafePilot program allows safe drivers to earn up to 30% off their premiums.¹² A mobile app collects data on harsh braking, time of day, phone handling, and other driving behaviors to create a safe driving score. If the score makes you eligible for a discount, you can apply it at policy renewal. Scores also reset at policy renewals to give drivers a fresh start.

How credit score affects your car insurance rates

Your credit history can positively or negatively affect your car insurance rates by hundreds of dollars. Based on data from millions of Insurify customers, a poor credit score correlates to a monthly car insurance payment that’s about 76% higher than the average rate for drivers with an excellent credit score.

This effect is even bigger than having a DUI on your record, which only increases premiums by 65% compared to a clean record.

Here’s what Insurify’s data shows about average premiums broken down by credit score tiers.

Based on these numbers, a driver with poor credit will pay $1,608 more per year on average for car insurance. This makes it worthwhile for drivers with poor credit to work on improving it.

Cheapest car insurance for drivers with poor credit

Even with poor credit, you can still save — and choosing the right insurer is one way to do so. According to Insurify’s database, drivers with poor credit typically find the cheapest car insurance at USAA. On average, USAA can save drivers with poor credit about 6% more than GEICO and about 33% more than Progressive.

Using Insurify’s data, here’s a list of the top 15 cheapest car insurance companies for drivers with poor credit.

How to get cheap car insurance with poor credit

Finding the right insurance for you will typically involve several factors. Discounts, available programs, and personal needs can all factor into your decision. To help you navigate your decision with confidence, here are a few tips to help you get the cheapest car insurance — even if you have poor credit.

1. Consider local or regional insurers

Sometimes, local or regional insurers offer lower prices than national brands. In fact, in our chart above that lists the top 15 cheapest insurers for drivers with poor credit, three spots belong to regional companies.

Auto-Owners caters to drivers in the Midwest and South, Erie serves Midwestern drivers, and Plymouth Rock focuses on New England. Our chart also shows these companies outperforming the major brand Progressive.

2. Bundle your policies

Many insurance companies offer discounts for bundling your policies. For example, Liberty Mutual customers who bundle their home and auto policies save up to $950 per year on their premiums.¹³ Likewise, Progressive customers who bundle home and auto typically save over 20% on average.¹⁴ Plus, receiving these savings is often as simple as hopping on a phone call with your agent.

3. Ask about discounts

In addition to bundling your policies, many insurance companies offer additional discounts. Things like a driver’s status, driving history, or vehicle features might lead to savings. A few examples of discounts to ask about include:

• Safe driving discounts

• Student discounts

• Going paperless discounts

• Auto-payment discounts

• Military discounts

• Loyalty discounts

• Low-mileage discounts

• Anti-theft device discounts

This list is a great starting point, but don’t feel limited to just these items. It never hurts to ask your insurance company what other discounts it offers to see if you qualify for any.

4. Consider a higher deductible

Switching your policy to a higher deductible will lower your monthly payments, but it’s important to weigh the pros and cons carefully first. A higher deductible means higher out-of-pocket costs if you need to file a claim.

This can make unforeseen incidents — like an accident that totals your vehicle — more financially devastating. However, if a higher deductible is the difference between having essential insurance or not, it might be worth it.

5. Shop around and compare quotes

Shopping around can be one of the best ways to find cheaper insurance. Plus, tools like Insurify can help you easily compare car insurance quotes from hundreds of insurers. That way, you can be confident you’re getting the best price when choosing a company.

While your credit tier and insurance rates typically go together, people with poor credit still have ways to get and save on car insurance. Try looking for telematics or UBI programs, as well as driver discounts.

Methodology

To provide information on different telematics programs, the team at Insurify pulled directly from the program information pages at each company. In some instances, our team used information from FAQs and terms and conditions pages to find more complete information on each program.

Additional statistics on car insurance rates came from Insurify’s database. This database uses self-reported information on drivers’ vehicles, driving history, and demographic factors in combination with the insurance quotes they receive.