Obtaining car insurance with bad credit can be difficult, yet it is not unachievable. Individuals with poor credit ratings frequently encounter elevated premiums, as insurance companies consider them to be higher risk. According to MoneyGeek, drivers with bad credit typically pay approximately $51 more each month, totaling over $1,500 annually, compared to those with good credit.
Nevertheless, there remain affordable insurance options for those with bad credit, as well as credit-friendly car policies. This guide delves into the impact of credit on your insurance rates, offers advice for securing inexpensive coverage, and discusses car insurance for individuals with Car Insurance for Bad Credit.
A car parked by an insurance agency sign, illustrating the search for car insurance options despite bad credit. While having bad credit often means higher rates, you can still find low-premium options by choosing the right insurer.
Many companies use a car Insurance for Bad credit set rates, so improving your credit or finding insurers that are high-risk-friendly can lead to more affordable coverage. Read on to learn how credit affects your policy and which carriers are best for drivers with poor credit.
How Bad Credit Impacts Your Car Insurance for Bad Credit?
Your credit score is a major factor in auto insurance pricing. About 95% of U.S. auto insurers offer Insurance for Bad Credit scores (derived from your credit history), where it’s allowed.
This means drivers with poor credit usually pay significantly higher premiums. For example, MoneyGeek’s analysis shows the average annual premium for a bad-credit driver is roughly $1,150 at GEICO versus $3,158 at State Farm.
In general, insurers see car Insurance for Bad Credit drivers as more likely to file claims, so car Insurance for Bad credit can mean paying hundreds or even thousands more per year.
Not all factors are within your control: insurers also consider age, driving history, location, and vehicle. But in many states, your credit score alone can raise your rate by 30–100% compared to a good-credit driver.
This gap underscores the importance of shopping around: while one company may hit you with a high bad-credit surcharge, another may offer more Car Insurance for Bad Credit or discounts to offset it.
States That Don’t Use Credit Scores?
Importantly, some states prohibit insurers from using credit scores for auto rates. Currently, California, Hawaii, Maryland, Michigan, and Massachusetts ban or limit credit-based pricing.
Some other states, such as Oregon and Utah, have certain limitations. If you reside in one of these areas, insurance companies are required to overlook your credit score when providing quotes. In the other states, credit scores can be considered, which means that if you have bad credit, your auto insurance quotes may be elevated. It’s important to always verify the regulations in your state: individuals in protected states essentially have access to Car Insurance for Bad Credit.
How to Find Affordable Car Insurance With Bad Credit?
Even with poor credit, you can lower your premium by being proactive. Try these tips to get low-premium options:
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Compare quotes from multiple insurers. Prices vary widely for car Insurance for Bad Credit. Always shop around and get at least 3–5 bad credit auto quotes. An independent agent or online comparison tool can help. One insurer might charge you 20–30% more than another for the same coverage, so comparison is key. Car Insurance for Bad Credit.
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Maintain continuous coverage. Gaps in insurance (or too many claims) can hike rates. Many insurers reward consistent coverage. As one expert advises: get a policy early, keep it active, and avoid lapses – insurers tend to offer substantial discounts after six months or a year of continuous, claim-free coverage.e
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Maximize discounts. Almost all companies offer discounts – stack them if you can. Common savings include multi-policy (bundling auto and home/renters) and good-driver discounts. Payment discounts (e.g., paying annually or using EFT) and safety device discounts also help. For example, GEICO has dozens of discount categories (safely driving, affiliations, customer loyalty, etc.) that can save you 20–25% on your premium. Always ask your agent about every discount. Car Insurance for Bad Credit
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Consider usage-based or pay-per-mile plans. If you drive infrequently or safely, telematics programs can cut your rate. Nationwide’s SmartRide, for instance, gives a 10% sign-up credit and up to 40% off for safe driving, which is higher than most insurers. Allstate and other carriers have similar apps. A low-credit driver who rarely drives might save more through safe-driving perks than be penalized for their Car Insurance for Bad Credit.
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Adjust coverage/deductibles. Analyze what coverages you truly need. If you own an older car, drop unnecessary collision or comprehensive coverage to save money. For a vehicle worth under $4,000, continuing to pay for collision coverage may be wasteful. Likewise, raising your deductibles (the amount you pay out-of-pocket in a claim) will lower your premium. Just be sure you can afford the higher deductible if an accident occurs.
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Correct credit report errors. Verify your credit score beforehand. You’re entitled to free credit reports weekly from Equifax, Experian, and TransUnion (via annualcreditreport.com .. If there are errors (like missed payments or fraud dragging down your score, dispute them before shopping for insurance.
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Drive safely and file claims wisely. Your driving record matters too. Avoid traffic violations and at-fault accidents if possible. And think twice before filing small claims: each claim can raise your rates more than paying out-of-pocket for minor damage.
By combining these strategies (comparison shopping, discounts, coverage tweaks), you’ll find more affordable bad credit insurance despite a low credit score.
Top 10 Car Insurance Companies for Bad Credit?
Here are ten carriers and programs that stand out for drivers with poor credit. We’ve focused on availability, special programs, and discount opportunities that help offset bad-credit surcharges.
1. GEICO
GEICO is often the cheapest option for drivers with bad credit.t In one analysis, its average annual premium for a bad-credit driver was just $1,150– far below many competitors. GEICO also offers car Insurance for Bad Credit (vehicle safety features, good driver, loyalty, etc.) that can save 20–25% on your premium.
GEICO’s robust mobile app makes it easy to manage your policy or submit claims. Note: credit policy varies by state, but overall, GEICO is very aggressive with savings programs, making it a smart pick for low-credit drivers.
2. Nationwide
Nationwide may not run the cheapest base rates, but it offers unique usage-based programs that benefit high-risk drivers. Its SmartMiles or SmartRide programs give a 10% participation credit plus up to 40% off for safe driving, one of the largest UBI discounts available. That means if you drive carefully (even with bad credit), you can cut your rate significantly.
Nationwide also provides common discounts (multicar, good student, defensive driving) for extra savings. Do check availability: Nationwide isn’t in every state.
3. Progressive
Progressive’s flexibility makes it good for poor-credit buyers. It offers a Name Your Price tool to help find coverage within your budget, and its Snapshot telematics program rewards safe driving with lower rates. Progressive’s average rates for bad-credit drivers are competitive..
Notably, Progressive includes perks like accident forgiveness (so your first at-fault accident won’t raise rates) and roadside assistance in many The company will also re-evaluate your premium if your credit improves – just provide new documentation, since Progressive may not pull your credit routinely.
4. State Farm
State Farm is the nation’s largest auto insurer, making it widely available (and useful if you move states). While its average premium for Car Insurance for bad-credit drivers is high, it offers many ways to reduce costs. State Farm offers a “Drive Safe & Save” program and Steer Clear discount for young drivers, plus traditional savings for bundling, multi-vehicle, and anti-theft devices..
Importantly, if you need an SR-22 certificate (proof of insurance after a suspension, State Farm agents can file it for you, which is helpful for high-risk drivers. State Farm’s extensive agent network also provides personalized assistance in finding credit-friendly coverage.
5. Travelers
Travelers is another large insurer known for accommodating various drivers. It offers unique coverages like new car replacement (replaces a totaled vehicle with a new one othe f the same model) and accident forgiveness. Travelers will consider your improved credit if you request a policylatrlaterview lat..er They also give standard discounts (safe driver, good student, bundling.
Travelers’ commitment to service has earned high customer ratings, which can be reassuring for bad-credit drivers who want stability.
6. Acceptance Auto Insurance
Acceptance is a specialty insurer that focuses on high-risk drivers, including those with bad credit. Its marketing explicitly promises “affordable options tailored for individuals with varying financial scores.” In practice, Acceptance offers flexible payment plans including weekly or monthly options with no large down payment. And generally approves drivers that larger insurers might refuse.
Acceptance agents will shop your profile across multiple carriers, trying to find the best bad-credit auto quotes. If you’ve struggled to get insured elsewhere, Acceptance is worth exploring. Note: it may not be the cheapest on average, but it often can insure drivers who are considered “uninsurable” by others.
7. The General
The General is a well-known non-standard insurer for high-risk drivers. It is widely available and has no down-payment options, which can help if you have limited funds. However, the General’s rates are high. For example, MoneyGeek found The General’s average annual premium for car Insurance for bad-credit drivers is around $3,895much higher than major carriers.
Still, if your credit (or driving record) is very poor and other insurers deny you, The General will likely insure you. You can then try to improve your score and switch later. In short, the General provides guaranteed issue coverage (assuming state requirements are met) but at a premium.
8. Direct Auto Insurance
Direct Auto (and its affiliate Dairyland) are high-risk specialists. They operate in many states, targeting drivers turned down by standard carriers. Direct Auto markets specifically to poor-credit and problem drivers, often accepting nearly any driving/credit profile.
As noted by AutoInsurance.com, “high-risk insurers like Direct Auto and Dairyland specialize in offering policies to high-risk drivers.”Expect high rates and limited discounts, but you can get insured. These insurers can be a lifeline if others won’t quote you at all, so they belong on the list.
9. Dairyland Insurance
Dairyland is closely related to Direct Auto (often the same underwriter in some states). Like Direct Auto, it serves high-risk customers, including low credit. Policies are similarly expensive, but Dairyland often has promotions or multi-vehicle discounts that slightly improve the cost. They sell mostly through independent agents.
If Direct Auto isn’t in your area, Dairyland might be. AutoInsurance.com notes that while their rates are higher than average, companies like Dairyland can “help you stay covered” when others refuse.
10. Cure Insurance
Cure (Citizens United Reciprocal Exchange) is a unique, credit-friendly insurer. Cure stands out because it does not use credit scores at all when setting rates. It also ignores factors like education or occupation. This means your premium is based only on your driving history and vehicle. Car Insurance for Bad Credit
Cure offers standard liability and full coverage, plus 24/7 roadside assistance. The trade-off is availability: Cure only operates in a handful of states (e.g., Georgia, New Jersey, Tennessee). If you live in a Care service area, it can be an excellent choice for bad-credit drivers who want to avoid credit checks altogether.
Conclusion
Finding the best car insurance for bad credit requires persistence and research. Car insurance for bad credit doesn’t have to be prohibitively expensive; by comparing quotes, maximizing discounts, and considering specialized carriers, you can secure coverage that fits your budget. Remember that credit policies vary by state and company what’s unaffordable with one insurer may be reasonable with another.
While improving your credit score is the ultimate way to lower premiums, these ten options offer high-risk coverage and low premium opportunities in the meantime. From mainstream insurers like GEICO and Progressive (which balance discounts with competitive rates) to specialized high-risk insurers like Acceptance and The General, there are paths to coverage. Even if you need an SR-22 certificate, companies like State Farm can assist with the filing.
By shopping smartly and choosing a Car Insurance for Bad Credit-friendly policy, you can protect yourself legally and financially even with poor credit. Get quotes from several of the insurers above and ask about all available discounts. With the right approach, you’ll find car insurance coverage to keep you on the road without breaking the bank.
FAQs
Q: Does bad credit affect my car insurance rates?
A: Yes. In most states, insurers factor a Car Insurance for a Bad credit score into your rate. Drivers with poor credit typically pay significantly higher premiums than those with good credit. (The exception is if you live in a state that bans credit use in insurance, like CA or HI
Q: Are there insurers that don’t check my credit history?
A: A few do. Cure is known for not using your credit score at all when pricing a policy. In states like California, Hawaii, Massachusetts, and Michigan, state laws force all insurers to ignore credit scores. Some smaller companies or reciprocal exchanges may also skip credit checks. Always ask if an insurer is credit-sensitive before you apply.
Q: How can I save on car insurance with bad credit?
A: Compare multiple quotes; rates vary widely for bad-credit drivers. Ask for every discount (bundling, safe driving, security devices). Consider usage-based programs if you drive less; for example, Nationwide’s SmartRide can earn big discounts for careful driving. Raise deductibles and drop optional coverages on older cars. Each of these steps can lower your premium despite a low credit score.
Q: Why do some drivers with bad credit need an SR-22, and can I get it?
A: SR-22 is not tied to credit – it’s a form to prove insurance for drivers who’ve had serious violations (like a DUI). If you need an SR-22, many insurers will file it for you. For example, State Farm agents can help secure and file an SR-22 certificate with the state. Even if you have bad credit, as long as an insurer is willing to cover you, they can attach an SR-22 to your policy.
Q: What is a credit-based insurance score?
A: It’s a special score derived from your credit report, used by insurers to predict he likelihood of filing a claim. It’s not exactly your FICO score, but it uses similar data (payment history, debt, etc.). Insurers use this where allowed to adjust your premium. If your credit score is low, a low insurance score usually means higher premiums
Q: Can I get insured if my credit is really bad?
A: Yes. Many insurers specialize in high-risk drivers. Companies like Direct Auto, Dairyland, Acceptance, and The General will provide coverage even if your credit and driving history are poor. The premiums will be higher, but you can still stay legally insured. Improving your credit and maintaining a clean driving record over time will eventually allow you to switch to cheaper standard insurers.
These answers should help you understand how bad credit affects car insurance and what to do about it. Share your thoughts or questions below – and remember, finding the right policy takes shopping around and asking the right questions.
