| This is a good year for drivers in | | | | want a better idea of whether you take care |
| California. Way back when in 1988, | | | | of your financial affairs before agreeing to |
| Proposition 103 received more than enough | | | | pay out if you get in a traffic accident. |
| support from voters to pass. Basically, | | | | |
| voters wanted car insurers to set rates based | | | | The first step in setting the auto insurance |
| on the driver's record and the number of | | | | rate is whether you qualify for any |
| miles driven. Three years ago, the | | | | discounts. For example, most companies offer |
| Commissioner for Insurance introduced new | | | | discounts if you can pay an annual premium |
| rules prohibiting the use of ZIP codes as the | | | | rather than by monthly or half-yearly |
| primary factor for determining car insurance | | | | installments. Then comes the math work. There |
| rates. These rules came into force July 14. | | | | are statistical methods to determine the risk |
| This is one battle won for consumers' rights. | | | | of you getting in an accident. If you're a |
| The war goes on. Zip codes remain a dominant | | | | late payer who gets into trouble with liens |
| factor in other states. Similarly, insurers | | | | and mortgages on your property, if you rent |
| also check out your credit score. Almost | | | | rather than own, you may not take as much |
| every company seems to think that people with | | | | care of your property as others. Add in lack |
| low credit score make bad drivers. | | | | of consistency in employment and multiple |
| | | | lines of credit getting close their the |
| So what's going on? Well, it's all about how | | | | maximums, and you're considered a higher risk |
| to define risk. All the factors go into the | | | | driver. It may not feel fair. It probably |
| melting pot. How old you are, where you work, | | | | isn't completely fair. But that's the way |
| where you live, whether you own or rent your | | | | insurance credit scoring works. |
| home, whether you own the car outright or | | | | |
| have a car loan, what make and model of car, | | | | So, before you go online for your next car |
| and so on. This personal information is | | | | insurance quotes, check out your credit score |
| included in your credit history. It gives the | | | | and, if necessary, repair the score. The Fair |
| companies a snapshot of who you are. Is it | | | | Credit Reporting Act gives you the right to |
| fair to look at this information? | | | | get free copies of your credit reports. Use |
| Unfortunately, yes. Just as a loan company | | | | that right and get your credit score into |
| wants to know more about you before making | | | | shape before getting quotes. |
| the offer of a loan, car insurance companies | | | | |