What impact does identify theft have on your car insurance rates?
An often-overlooked byproduct of identity theft is its impact on auto insurance rates. Identity theft can have major ramifications on one's credit score, in turn leading to inflated auto insurance premiums. Let’s explore what can happen to your car insurance after identity theft and what you can do to save money in this difficult circumstance.
Most car insurance policies offer no coverage against identity theft. However, you can find protection via a renters' or homeowners' insurance policy. By adding an identity theft “rider” — or “endorsement” — to your agreement, you can earn reimbursement for losses up to a certain amount.
This coverage, which typically costs between $25 and $50 per year, might be unnecessary. Most banks and credit card companies protect against identity theft by covering any corresponding losses. If you’re interested in adding an identity theft rider to your property insurance policy, make sure you’re not already covered by your bank or credit card company.
The only way in which identity theft impacts car insurance is through its impact on your credit score. Unless you live in California, Hawaii, or Massachusetts, your credit score plays a major role in determining your car insurance rates. Historical data and research by the Federal Trade Commissions show drivers with poor credit file more expensive claims, and file claims more frequently.
While your credit score might only be low because of identity theft, a car insurance company might not make an exception based on these circumstances.
Using our base user profile, we pulled rates from popular insurance companies to see which offered the cheapest auto insurance for drivers with low credit levels.
| Insurance Company | Average Annual Premium |
|---|---|
| Allstate | $2,833 |
| Farmers | $2,395 |
| GEICO | $1,923 |
| Liberty Mutual | $2,968 |
| Nationwide | $1,524 |
| Progressive | $3,139 |
| State Farm | $3,143 |
| USAA | $2,303 |
Nationwide is the cheapest company for a driver with poor credit. With bad credit, a policy from Nationwide costs $762 for a standard six-month policy ($127 per month).
| Insurance Company | Average Annual Premium |
|---|---|
| Allstate | $2,442 |
| Farmers | $2,011 |
| GEICO | $1,630 |
| Liberty Mutual | $2,571 |
| Nationwide | $1,441 |
| Progressive | $2,614 |
| State Farm | $2,505 |
| USAA | $1,726 |
Nationwide is the cheapest company for the "fair" credit tier (the classification just above "poor"). A Nationwide policy costs an average of $120 per month — or $720 for a six-month policy. At the end of the day, your best bet for finding car insurance is to assess as many companies as possible. Enter your zip code below to get started.
If you’re looking for additional resources regarding your credit score and car insurance, see our related articles below!
