People with no credit pay an average of 53 percent more than people with excellent credit, the study found.
The findings were a surprise to Carrie Rasper of Miamisburg.
“I am upset now because my credit rating is not that great,” Rasper said
Credit is one of the many factors used to determine insurance rates, and has been for nearly twenty years, according Reno Insurance agent Kelley Reno-Culley.
“Credit has been proven time and time again to be a good indicator that an individual is more likely to have a loss,” Reno-Culley said.
Insurance companies factor in credit scores at varying degrees, so you can shop around for a better deal
“Go to an independent agent that represents a lot of different companies,” said Reno-Culle. “You can find a company that rates your credit a little less of an importance.”
The WalletHub study found that Farmers Insurance appears to rely on credit data the most when deciding on premiums, while Geico uses it the least.
„This is not unusual,“ Mary Bonelli, Senior vice president of Public Information at the Ohio Insurance Institute, said of the report.
Bonelli said Ohio has fared well historically compared to other states in terms of premium costs, coming in as low as second cheapest in the nation in another recent report.
Value Penguin reached its conclusion by collecting quotes from insurers using a person with the same demographics in each major city: a 30-year-old male who drives a Toyota Camry, is single and has no tickets or accidents. Dollar amounts are an average of quotes from 28 insurance companies in Ohio.
The report finds the average yearly car insurance premium in Columbus to be around $1,365. That’s 10 percent higher than the state’s average, but doesn’t include suburbs like Grove City and Gahanna.
“It’s hard to definitively say why,” said Craig Casazza, the research analyst who authored the study. Casazza added it’s possible people are just filing fewer claims in Columbus, making it hard for insurers to justify higher rates.
Insurers generally are tight-lipped when it comes to their rate-setting methodology, Casazza said.
But Bonelli told me insurance companies in the state are are forced to price premiums competitively given the amount competition. Ohio has 660 auto insurance carriers, third only to Illinois and Indiana.
She added the regulatory environment in Ohio is such that insurers can adjust rates relatively freely compared to other states. This can keep premiums low.
Casazza and Bonelli both said accident rates can impact premium pricing, but that that doesn’t seem to be the biggest reason rates are so low in Columbus.