Does Your Credit Score Affect Your Auto Insurance Rates in Canada?

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Depending on where you live, the answer is yes

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You’re finally on the road in your refurbished vintage Bronco, but if your credit is bad, you could lose money as you go.

Normally, your credit score is used to show lenders that you can be trusted to make your monthly payments. However, depending on the province in which you live, your credit score can also affect your monthly auto insurance premium.

What is the link ? Insurance companies argue that those responsible for their credit are more likely to be responsible for their cars, keep them in good condition, and obey the traffic laws.

Which provinces allow credit checks?

If you live in Ontario Where Newfoundland and Labrador , you can breathe easily. It is illegal for auto insurance companies to use your credit score.

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This is already the situation in New Scotland , although you may not be denied insurance if you decline. And recently, in March 2021, the province’s insurance regulator approved an application by RSA Canada to offer discounts to auto insurance policy applicants based on their credit scores.

In Alberta , insurers must seek consent before taking a look at your credit score, and they are prohibited from using it if you only want the most basic plan.

In Manitoba and British Columbia , the provincial government regulates the business. Neither the Manitoba Public Insurance Corporation (MPI) nor the Insurance Corporation of British Columbia (ICBC) lists credit scores among their criteria.

it’s the same for Saskatchewan and its Saskatchewan Government Insurance (SGI). However, although drivers are required to obtain basic coverage through SGI, you may face a credit check if you want additional coverage through a private company.

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In September 2021, the largest automobile insurer in New Brunswick , Wawanesa, was successful in convincing the province’s Insurance Commission that drivers with bad credit are at a higher risk of making a future claim.

Quebec and Prince Edward Island do not have rules prohibiting the practice, but this is not common in the Maritime provinces.

No matter where you live, the best way to save on auto insurance is to shop around before choosing the right policy for your needs and budget. A site like Rates.ca will do all the price comparisons for you and bring you the highest quality auto insurance at the best available rates.

How much should I be worried?

Since drivers with an A-plus score can get behind the wheel with the best deal, they’re probably happy enough to put their credit score up and save a few bucks on their premiums. If you don’t know your score, you can check it for free.

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But what if you are a young adult, a newcomer to Canada, unemployed, or barely alive? If you haven’t been able to establish or maintain a strong score, insurers may charge you a higher premium, making it more expensive to get to work, school, or a date. at the doctor.

That said, insurance companies look at many other factors when they assess you, including your region, driving experience, accident history, and the type of car you drive. (Unfortunately, many insurers also judge you on your age and gender.)

We also have a consumer watchdog called the Insurance Bureau of Canada. It has published a voluntary code of conduct for credit checks and says 85 percent of auto and personal property insurance companies in Canada have adhered to it. Some of the friendly ground rules include:

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  • Ask for your consent before checking your credit score.
  • Do not cancel or refuse insurance when you do not consent to it.
  • Use other relevant information to calculate your premiums if you don’t have a great deal of credit history.

If you are working with a money-saving site like Rates.ca to find a lower auto insurance rate, you can also ask to be matched with insurers that ignore or weight credit scores. not a lot.

This article was created by Wise Publishing. Wise is dedicated to providing information that helps readers navigate the complex landscape of personal finance. Wise only associates with brands he trusts and believes may be of use to the reader. This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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