Car Insurance After Identity Theft
What impact does identify theft have on your car insurance rates?
Identity theft and car insurance
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.
Car insurance and identity theft
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 $30 and $60 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.
How does identity theft affect credit score?
The only way in which identity theft impacts car insurance is through its impact on your credit score. Historical data and research by the Federal Trade Commission 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.
Unless you live in California, Hawaii, Maryland, Michigan, or Massachusetts, your credit score plays a major role in determining your car insurance rates. Other states have begun to limit credit scores and their impact on insurance rates in certain circumstances, such as Utah and Oregon.[1] This topic is being debated often, and because states make their own laws regarding credit usage, it's best to contact your Department of Insurance to check current regulations.[2]
Cheapest car insurance companies for bad credit
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. According to our data, Travelers, USAA, and Nationwide are the cheapest options if your credit is bad.
With poor credit, a standard six-month Travelers policy costs $671 ($112 per month). The following table sorts by credit tier to show which companies offer the cheapest options.
Updating data...
| Company | Avg. 6 Mo. Premium | Avg. Monthly Premium |
|---|---|---|
| Nationwide | $992 | $165 |
| GEICO | $1,087 | $181 |
| USAA | $1,196 | $199 |
| Travelers | $1,197 | $200 |
| American Family | $1,242 | $207 |
| Farmers | $1,362 | $227 |
| Allstate | $1,717 | $286 |
| Progressive | $1,858 | $310 |
| State Farm | $2,063 | $344 |
Source: The Zebra
Travelers, USAA, and Nationwide are the cheapest companies for the "fair" credit tier (the classification just above "poor"). Travelers' policies for drivers with "fair" credit are on par with the rates for those with "poor" credit at $112 per month. USAA offers rates of about $2 more monthly if you're a military member. Your best bet for finding car insurance is to assess as many companies as possible. Enter your zip code below to get started.
Find the best car insurance rates based on your credit.
Often, it's just a waiting game after your identity has been stolen and your credit damaged. However, there are steps you can (and should) take to protect yourself in the future and be aware of any fraudulent activity. Notify the credit bureaus if you've been the victim of identity theft, and set alerts if any new credit is opened in your name. If there are discrepancies on your credit report, reach out to the bureau to report and try to get it removed from your credit report.[3]
Also, remember to shop around for new car insurance rates every six months or so. Recovering from identity theft could take a while, but remember that credit isn't the only rating factor considered. If big things have changed in life (such as a marriage, milestone birthday, or a move out of state, for example), then it's a great time to compare rates and see if you could be saving money.
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About The Zebra
The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.
- The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
- The Zebra’s insurance editorial content is not subject to review or alteration by insurance companies or partners.
- The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
- The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.