In all but a handful of states, car insurance companies use a version of your credit score to determine your monthly premiums.
Not surprisingly, those with lower credit-based insurance scores usually pay more: According to data from Bankrate, drivers with bad credit (a FICO score below 579) pay 118% more on average for full coverage than those with excellent credit (a FICO score of 800 or above).
CNBC Select analyzed leading auto insurers and chose five standouts based on their rates for drivers with lower credit scores, as well as coverage options, availability, customer service and other factors. (See our methodology for more on how we chose the best companies.)
Best for affordability: Geico
Geico Auto Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
Geico auto coverage is available in all 50 states and the District of Columbia. It offers 16 discounts and a variety of optional add-ons, such as emergency roadside assistance, rental car reimbursement and mechanical breakdown insurance.
Pros
- Low average rates
- Can buy and manage policies online
- Available nationwide
Cons
- No gap insurance or rideshare insurance
- Fewer branches for in-person services
- Pay-per-mile car insurance not available
Who’s this for? Geico has the cheapest average rates of the companies we reviewed for drivers with bad credit.
Standout benefits: Geico’s safe-driving discount can save you up to 22% if you remain accident-free for five years. Putting more than one vehicle on your Geico policy can knock 25% off your premium. There are also rate reductions for federal employees and members of the U.S. military.
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Best for discounts: Amica
Amica Auto Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
Amica offers full and minimum coverage auto insurance, with add-ons accident forgiveness and new car replacement. The Platinum Choice® Auto plan includes new car replacement, credit monitoring and rental coverage with no daily limit.
Pros
- High customer satisfaction ratings from J.D. Power
- Bundling home and auto can save you up to 30%
- Drivers in some states are eligible for dividends
Cons
- More higher-than-average rates for most driver types
- Switching from 12-month policies to 6-month
Who’s this for? Amica’s rates for drivers with poor credit are 30% below the industry average. The insurer also has 18 discounts for auto insurance customers, enabling you to save even more.
Standout benefits: Enjoy a bundling discount of up to 30% if you have life, home or renters insurance with Amica. You can also get a break if you’re a homeowner or your car has electronic stability controls or other safety features.
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Best for drivers with tickets: First Acceptance
First Acceptance Auto Insurance
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Cost
The best way to estimate your costs is to request a quote
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Policy highlights
First Acceptance Insurance Company has been underwriting insurance policies since 1969. It specializes in coverage for high-risk motorists, young drivers and those with bad credit.
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App available
Pros
- Competitive rates for high-risk drivers
- SR-22 certificate available
- Flexible payment schedules
Cons
- Limited number of endorsements
- Not available in all states
- High volume of complaints
Who’s this for? First Acceptance specializes in high-risk drivers who find it hard to get coverage elsewhere, including drivers with bad credit, speeding tickets, at-fault accidents and DUIs.
Standout benefits: If you’ve had serious violations and need a certificate of financial responsibility, First Acceptance issues SR-22 forms.
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Best for drivers with accidents: Dairyland
Dairyland Auto Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
Founded in 1953, Dairyland offers auto insurance in 38 states and specializes in high-risk drivers. Offerings include non-owner car insurance policies, coverage for motorcycles and off-road vehicles and limited Mexico coverage on all California policies.
Pros
- Insures high-risk drivers
- Offers coverage for motorcycles and off-road vehicles
- Limited Mexico coverage included with California policies
- Lower volume of complaints
Cons
- Not available in all 50 states
- Higher-than-average rates
- Limited number of discounts
Who’s this for? Dairyland insures high-risk drivers and could be a good fit if you have an at-fault accident on your driving record.
Standout benefits: The Wisconsin-based company offers types of coverage many other insurers don’t, including non-owner coverage, SR-22 certificates and limited coverage for travel in Mexico on all California policies.
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Best for infrequent drivers: Nationwide
Nationwide Auto Insurance
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Cost
The best way to estimate your costs is to request a quote
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App available
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Policy highlights
Nationwide offers near-nationwide availability and personalized services, such as On Your Side® Review, a free annual insurance evaluation to ensure you are adequately protected and are taking advantage of any discounts available to you.
Pros
- Available in 46 states and the District of Columbia
- Lowest average premiums for full coverage
- Quotes available online
Cons
- High average premium for minimum coverage
- Not available in all states
- Lower than average scores from J.D. Power’s customer satisfaction survey
Shop for car insurance that’s right for you
More on our top car insurance for bad credit
Geico
Now a subsidiary of Berkshire Hathaway, Geico has been insuring drivers since 1936. It received an A+ from the Better Business Bureau and has far fewer complaints than similarly sized providers, according to the National Association of Insurance Commissioners (NAIC).
Nationwide availability: Available in all 50 U.S. states and the District of Columbia
Average annual rate for drivers with poor credit: $2,447 per year
J.D. Power claims satisfaction rating: Below average
A.M. Best rating: A++
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Amica
Nationwide availability: Available in all states except Hawaii.
Average rate for drivers with poor credit: $2,861 per year
J.D. Power claims satisfaction rating: Above average
A.M. Best rating: A+
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First Acceptance
Nationwide availability: Available in Alabama, Arizona, California, Florida, Illinois, Indiana, Georgia, Mississippi, Ohio, Pennsylvania, South Carolina, Texas, Tennessee and Virginia.
Average rate for drivers with poor credit: N/A
J.D. Power claims satisfaction rating: N/A
A.M. Best rating: C++
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Dairyland
A subsidiary of Sentry Insurance, Dairyland has been offering auto insurance since 1953 and specializes in motorists with poor driving records and low credit scores. While Dairyland was not rated by J.D. Power, it received an A+ from the Better Business Bureau.
Nationwide availability: Available in 38 states
Average rate for drivers with poor credit: N/A
J.D. Power claims satisfaction rating: N/A
A.M. Best rating: A+
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Nationwide
Nationwide availability: Available in every state except Alaska, Hawaii, Louisiana and Massachusetts
Average rate for drivers with poor credit: $2,606 per year
J.D. Power claims satisfaction rating: Below average
A.M. Best rating: A
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How your credit affects your insurance rate
Actuarial studies indicate that how people manage their finances is a good indicator of whether they’ll file an insurance claim. In most states, therefore, insurance companies analyze your credit history to determine what’s known as an insurance score. (California, Hawaii, Maryland, Massachusetts, Michigan, Nevada, Oregon and Utah prohibit or restrict insurers from using credit-based insurance scores.)
While your credit-based insurance score isn’t the same as your FICO score, it’s calculated using most of the same information. Someone with a high credit score likely has a high insurance score.
| Insurance score range | Rating |
| 770-977 | Good |
| 626-769 | Average |
| 501-625 | Below average |
| 200-500 | Poor |
To find out your LexisNexis insurance score, you can reach out to LexisNexis and request your Consumer Disclosure Report.
FICO also has an algorithm to calculate insurance scores. It considers five factors, each assigned a different weight.
- Credit history: 40%
- Current level of debt: 30%
- Length of credit history: 15%
- New credit: 10%
- Credit mix: 5%
FICO doesn’t make its insurance scores available to consumers, but you can ask a current or prospective insurer to share yours.
How to improve your credit score
Your credit history typically accounts for 40% of your insurance score. So the easiest way to improve your insurance score is by improving your credit.
- Make on-time payments in full. Payment history is the largest segment of your credit score. A strong track record of on-time payments can boost your credit. (You’ll also avoid late fees and interest charges.)
- Request higher credit limits. If you raise your credit limit without spending more, it’ll lower your credit utilization ratio
- Hold off on new lines of credit. Applying for a loan or credit card could require a hard credit inquiry, which can ding your credit score. If you’re approved, it will also lower the average age of your accounts.
- Check your credit report for errors. Mistakes in credit reports are common and, while most are benign, some can damage your credit. Because the main credit-reporting agencies — Experian, Equifax and TransUnion — collect information independently, you should review your report with all three.
FAQs
Do car insurance companies check your credit score?
Car insurance companies in most states consider your credit-based insurance score when deciding on approvals and rates, along with your driving record, age, location, previous claims and other factors.
What states don’t allow insurers to use credit scores?
California, Hawaii, Maryland, Massachusetts, Michigan, Nevada, Oregon and Utah prohibit or restrict insurance companies’ use of credit in calculating rates.
What credit score do you need for car insurance?
While there’s no set minimum score to get car insurance, you’ll pay more if you have a lower score. Drivers with a credit score of 580 or below pay about 115% more for full coverage than the average driver with a credit score of 800 or above, according to Bankrate.
Does applying for car insurance hurt my credit score?
While insurance companies check your credit during the quote process, it’s a soft inquiry that doesn’t show up to lenders or change your credit score.
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Why trust CNBC Select?
At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every car insurance review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of insurance products. To research the best insurance companies, we compiled over 100 data points on more than a dozen insurance companies. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics. See our methodology for more information on how we choose the best insurance companies.
Our methodology
To determine the best insurance companies, CNBC Select analyzed dozens of insurance companies and compared them based on various factors, including cost, coverage, availability, ease of use and customer satisfaction
While narrowing down the best car insurance companies, we used a sample premium from Bankrate for a driver with a 580 credit score and incorporated customer satisfaction ratings from J.D. Power, the National Association of Insurance Commissioners and the Better Business Bureau.
We also considered CNBC Select audience data when available, such as general demographics and engagement with our content and tools.
From there, we sorted our recommendations by the best for affordability, for discounts, for drivers with speeding tickets, for drivers with at-fault accidents and for infrequent drivers.
Premiums and policy structures cited for auto insurance companies may fluctuate with company policy.
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Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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