The impact of your credit score on motor insurance premiums

While you must have heard that having a good credit score can offer multiple financial benefits, did you know it can also impact your motor insurance premiums? Yes, that’s correct! Maintaining a good credit score is key to unlocking lower insurance premiums even with Zurich Kotak Car Insurance. Read on to understand how.

Credit score

A credit score is an assessment that reflects your credit worthiness. Typically ranging between 300 and 900, it is based on your credit history and financial behaviour. It is influenced by your repayment conduct when you take credit. unpaid loan EMI, delayed credit card payments etc. can negatively impact your credit score. Credit score, also called the CIBIL score, is calculated by the Credit Information Bureau (India) Limited (CIBIL) on the basis of various financial institutions that you have dealt with.

In case you want to check your crest score, you can do it in a few simple steps online. The process is free and takes very little time. You can check it through our bank or any other financial portal. You would have to enter a few personal details, and the score would be displayed on your screen.

Credit score and motor insurance premiums

In India, there are a number of factors that can determine your car/ bike insurance premium. Some of these factors include the make, model and variant of the car, your age, driving history, the deductibles you choose and your credit score. A low credit score, anything less than 500, puts you in a bad light. It gives the car insurance company that you have not been very regular with your repayments, and thus, you may be considered a high-risk policyholder.

So, if you are a financial risk to the insurance company, you may have to pay a higher motor insurance premium. On the other hand, with a score of 750 and above, you can get discounts on your premium. In case you currently have a low credit score, fret not. There are some ways in which you can improve your credit score.

Improve your credit score

Increasing your credit score is not very difficult. A few lifestyle changes and basic financial etiquette can help you bring up your score. Here’s how:

1. Set reminders alarms on your phone to never miss a repayment or EMI

2. When borrowing money or purchasing an item on EMI, choose an amount that is well within your budget

3. Avoid going overboard with your credit card. Use your debit card in case you find it difficult to control your spending

4. Set all your repayments on auto-debit mode so that the repayment is not delayed

5. Pay your credit card bills as early as possible

6. Keep an eye on your bills so that there are no errors and discrepancies from your lender’s side.

Conclusion

It may have come as a surprise to you that your credit score can help you lower your motor insurance premium. At Zurich Kotak Car Insurance, we urge you to be regular with your repayment schedule, as it not only makes you creditworthy but also helps you lower your insurance premiums.

Related blogs

All You Need To Know About Car Insurance Nominee

How to compare your car insurance policy?

How To Insure Your Car for Standalone Own Damage In India