In a recent study conducted by the Coalition Protecting Auto No-Fault, it was discovered that, on average, Michigan women pay 33% more for car insurance than their male counterparts. In the study, the male counterparts had identical driving records, vehicles, and zip codes. Clearly, the only discernible difference was that members of the group paying more for car insurance coverage were female. The is bad enough, and, by some interpretations, illegal. However, when added to this discovery, another factor indicates that some Michigan women pay astronomically high car insurance premiums. This is the credit score factor. Unfortunately, Michigan is one of the states that allows auto insurance providers to use credit scores as risk factors. In another, entirely unrelated, study conducted recently, it was uncovered that Michigan drivers with poor credit pay almost $2,000 more per year for car insurance than drivers with good credit.
Why it Seems Obvious that Michigan Woman Pay More for Car Insurance than Men
Three car insurance companies inflate insurance premiums for female drivers in Michigan. These providers are Liberty Mutual, Progressive, and Esurance. These are national companies, but they don’t charge women more for coverage in every state. Strangely, Michigan allows this gender-biased inflation. It is also clear that these premium rate hikes are not the product of coincidence.
Again, the male and female groups in the study were chosen for their similarities. In addition, widows saw a sharp increase in insurance premiums when their spouses passed away. Conversely, premiums went DOWN for widowers after losing their wives. Interestingly enough, statistics typically show that the riskiest drivers on the road are young men. Women, on the other hand, and according to most studies, are, on average, safer drivers than men of all ages.
Why Credit Scores are Considered Risk Factors when Car Insurance Premiums are Calculated
In May of 2017 NerdWallet conducted a study entitled “Drivers with Poor Credit Pay Higher Insurance Rates in Most States.” In this study, it was revealed that, in Michigan, drivers “with poor credit” pay about $1,969 more per year than drivers “with good credit.”
In determining car insurance rates, providers look at various risk factors. Agents consider your age, zip code, type of vehicle, and, of course, driving record when calculating your risk profile. Then, in states that allow the practice, insurance companies throw a driver’s credit score into the equation. This is because, statistically, drivers with low credit scores file more insurance claims than drivers with good to excellent credit scores.
Largely condemned by consumer advocacy groups as unfair, most states in the U.S. allow drivers with bad credit to pay more for their car insurance coverage. Now, it seems that women with poor credit scores in Michigan have two factors working against them in the battle to get affordable auto insurance. Unfortunately, the gender issue will remain until consumers convince state lawmakers that charging women more for car insurance is unfair. However, Michigan drivers with bad credit can take action. With credit repair, these drivers can improve their credit scores and eventually save money on insurance coverage.
How Michigan Drivers Can Improve their Credit Scores and Save Money on Car Insurance
Michigan consumers who want to improve their credit scores in order to pay lower car insurance premiums should start with their bills. Staying current with payments is a crucial step toward building and maintaining a good credit score. Next, these Michigan drivers should pay down high credit card balances. Not every credit card user knows this, but using too much of your available credit hurts your credit score. This is because it makes you seem reliant on credit and possibly a lending risk.
Of course, some credit use is necessary when building a better credit score. Therefore, if you don’t have a credit card, you may want to apply for a secured credit card account or a card specifically designed for subprime applicants. Both types of credit cards usually come with low spending limits, so keeping balances at or below the recommended 30% requires some discipline.
Finally, checking your credit reports is a vital part of credit recovery. Often, Michigan consumers find errors on their credit reports caused by creditors and credit reporting agencies. These mistakes frequently bring down credit scores, so consumers must dispute them and demand their removal. Yet, the best and easiest way to get clean credit reports is to call Credit Repair Lawyers of America in Michigan. If you find credit report inaccuracies, call our firm, and an experienced credit attorney will fix your credit for free.
The Free and Legal way to Get Better Credit
Don’t let errors on your credit reports bring your credit score down. At Credit Repair Lawyers of America in Michigan, we’ve been cleaning up credit reports for consumers since 2008 for free. How do we do it? All of our fees come from the defendants in settled cases. This is why our clients pay nothing for the work we do.
Let’s start the conversation about what we can do for your credit. Set up your free consultation today by calling Attorney Gary Nitzkin at (248) 353-2882 or contact us on our contact page.