How Less Debt Equals Cheaper Insurance

Photo credit: penywise

In the last 2-1/2 years, we've reduced our debt by $21,000. As much as that feels good to say, that fact reaches farther than I knew it could.  Recently we learned that with a better credit score, we could get better insurance rates.  That sounded interesting since we haven't gotten our insurance requoted during that time frame.

So we called our existing  insurance agent and asked if they could run a credit check and see if it would affect our rates. We knew our scores were really good because we had seen them when we refinanced our home a few months ago. We didn't change companies.We didn't change our plan. Just reran the credit score. Honestly, all my husband and I did was sign a form and fax it to them.

We got a letter in the mail.  Our auto insurance rates were reduced by 13.5%!  Now, in dollars that isn't a huge amount because the cars are paid off and as their worth depletes, so does our insurance rate.  However, 13.5% is huge - especially since all we did is sign a piece of paper.

So if you've made some lifestyle changes and recently reduced your debt and have a lower debt to available credit ratio or if you've found another way to recently improve your credit score, contact your insurance agent. It's simplistic and can really save you some money!


Have you ever done this?  What other ways can you save in unexpected places?