Shop Carefully For The Best Auto Insurance Rates in Texas
A State Where It Pays To Shop For Good Rates
Many authorities recommend that a driver seeking Cheap Car Insurance should shop carefully in order to obtain the best auto insurance rates in Texas. Along with 46 other states, Texas permits insurers to consider an applicant’s credit rating in addition to factors such as driving history, miles driven and experience behind the wheel. Since every insurance company establishes its own unique formula for determining a premium, drivers in Texas may benefit significantly by shopping https://www.texasquotes.com/cheap-car-insurance/ around for the auto insurance.
A Controversial Practice
Although the vast majority of states today permit insurance companies to consider the credit rating of applicants, in the era of Big Data the practice has become somewhat controversial. Insurance underwriters argue that an individual’s credit rating holds predictive value in determining whether or not someone will ever file a claim. They also point to the variety of different price structures offered to consumers in Texas for auto insurance as a sign of healthy business competition. On the other side of this debate, a growing number of consumer advocates argue that driving history remains more predictive about claim filing than financial credit scoring.
In former eras, the argument about the utility of credit scores remained theoretical. However, as the power of large databases and computer technology has increased, for the first time analysts have begun evaluating auto insurance premiums against highly detailed background information. The results will likely interest some insurance companies seeking to offer more competitive rates.
Potentially Unfair Results
Recently, the respected organization Consumer Reports examined some two billion price quotes issued within every single zip code in the entire nation. According to The Dallas Morning News columnist Mitchell Schnurman, the results indicated that a driver in Texas with a weak or insufficient credit rating but a clean driving record in some cases pays nearly $1,000 more in automotive premiums every year than a driver with an excellent credit rating and a Driving While Under The Influence conviction. An attorney with a consumer watchdog group criticized these results.
A serious potential problem exists with the use of credit scoring in the calculation of auto insurance premiums in Texas because roughly two thirds of the drivers in the state possess credit scores lower than “excellent”. Many Texans pay high premiums. The Lone Star State’s inhabitants rank 47th nationwide in terms of credit rating. Unfortunately, Texans over the past few decades have witnessed unpopular overall auto insurance premium increases.
A Problem And an Opportunity
Since insurers establish their own auto insurance rate formulas, insurers in Texas are not compelled to use the same credit rating systems. This situation offers opportunities for concerned insurance firms to offer lower rates to the safest drivers.
For this reason, many industry experts advise consumers to shop around carefully for the best deals on auto insurance. Laws in the state require drivers to carry car insurance for safety reasons. Texans who search diligently sometimes obtain significantly lower premiums.