The state of Alabama, like most other states, does allow auto insurance companies to use your credit information as a rating factor. Currently all of the car insurance carriers we partner with in AL pull your credit report as part of their rating system.

Some insurers use credit information along with other more traditional rating factors, such as motor vehicle records and claims history. Other insurers may use credit alone to determine your rate. Insurance rates based on credit information can vary from company to company, so if you feel your rate is too high, shop around.

The Alabama Department of Insurance (DOI) notes that while AL insurance statutes do not prohibit credit scoring, and while there is some evidence that demonstrates the correlation between losses and bad credit, the DOI is in the process of promulgating a regulation to implement safeguards in the use of credit scoring in underwriting and rating. The regulation will ensure that credit scoring is used uniformly and never in a discriminatory fashion. Among other things, it will prohibit credit scoring’s use during renewal of coverage and as a reason for cancellation.

Many insurance companies, such as our partners in Alabama, do pull your credit report when determining your rates because risk assessors and actuarial studies have shown that a person's credit or financial history is a good predictor of insurance claims.

Insurance rates are not purely calculated based on credit history. There are other variables such as where you live, the type of car, driving record, etc. The goal of getting all of this information is to correlate the insurance premium rate as closely as possible with the actual cost of potential claims. You can get a quote with our insurance providers in AL and though they do pull credit reports it may be possible that if you have a low credit score that a safe driver discount or other discounts that are available will help absorb any higher rate caused your credit rating.

To find out though what auto insurance companies in Alabama do not use your credit report contact the AL DOI directly. Their consumer division may be able to help you since insurance companies have to file their rating systems with this state insurance regulator and thus the DOI may have a list of those insurers who do not use credit information as a rating factor.