Best auto insurance in Kentucky with bad credit

1
Ivelin Denev/Getty Images
Bankrate Logo

Why you can trust Bankrate

While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for . This content is powered by HomeInsurance.com (NPN: 8781838). For more information, please see our

Unless you live in California, Hawaii or Massachusetts, your credit score is affecting the cost of your car insurance. Numerous studies have shown that people with low credit scores are more likely to file larger claims than good credit drivers. Kentucky drivers looking for cheaper premiums may want to take steps to improve their credit score while also finding the best car insurance for them and their families.

Average cost of full coverage car insurance in Kentucky by credit

Provider Poor credit Average credit Good credit Excellent credit
State average $4,128 $2,533 $2,128 $1,934
National average $3,873 $1,865 $1,674 $1,487

Best car insurance in Kentucky with bad credit

The national average for a good credit driver is $1,674, which means a Kentucky driver with poor credit pays $2,454 more for car insurance.

When looking at your credit information, insurance companies usually look at a report called a credit-based insurance score, which they purchase from either LexisNexis or FICO. In these reports, drivers are labeled as either:

  • Poor
  • Average
  • Good
  • Excellent

If you notice, these are very similar to the categories your credit score can be labeled as. This is because the information that is used to calculate your credit score is the same information that is used to calculate your credit-based insurance score. The data comes from the same places — the Big Three credit bureaus, also known as TransUnion, Experian and Equifax.

In your credit report is information about:

  • Payment history
  • Length of credit history
  • Credit usage
  • Types of accounts
  • Recent activity

It is this activity that either gives you a strong score or a low score on your credit-based insurance score.

Why does my credit affect my car insurance rates in Kentucky?

The reason why a low credit score suggests a future accident may never be known. It can only be theorized. The only thing that insurance companies know is that there is a relationship between the two. Unfortunately, it is not just anecdotal. Recent studies by the Texas Department of Insurance and the FTC have both confirmed it. For example, in the FTC report, a study by Metlife showed that low credit drivers posed a 50% greater risk to both themselves and other drivers.

The question most drivers have is, if I improve my credit score, how soon will my premium go down?

Most drivers are on a 6-month policy, which means it takes six months for insurance companies to reexamine their data and give them a new premium. Because this can be a long time to overpay, many drivers opt to instead switch providers. While calculating a premium, the new provider will look at the most recent information, which should lead to lower monthly costs.

What other factors impact auto insurance rates in Kentucky?

The true cost of car insurance is impacted by a lot of factors besides a credit-based insurance score. In fact, the following factors often affect premiums significantly more than a credit score:

  • State or metro: Where you live in your state affects your premium. When calculating premiums, insurance companies look at the amount of claims coming out of a particular zip code. If there are a lot, this means you will be statistically more likely to file a large claim yourself one day. If it is practical, sometimes moving can save you a lot of money. For example, drivers moving to Orlando from Tampa save an average of $450 on their car insurance.
  • Vehicle type: A high end car costs more to insure than a mid-range one. Example: Honda Odyssey drivers pay an average of $1,454 a year for car insurance. Compare that to BMW 330i drivers? $2,225 a year. That is a $771 difference.
  • Driving history: Numerous traffic violations will inflate your premium more so than anything else, but the worst thing you can have on your driving record in Kentucky is a DUI. Expect to pay at least 100% more for car insurance after a DUI conviction. By staying safe and obeying all traffic laws, your premium will reflect your driving habits if given enough time.

How to get cheap car insurance in Kentucky with poor credit

Besides improving your credit score, finding cheap car insurance for bad credit in Kentucky comes down to implementing the following strategies:

  • Driving an older car: Car insurance for poor credit in Kentucky may depend on the type of car you drive. New cars cost a lot more to insure because they cost more to repair and to replace. If you instead go for an older car that has a high safety rating, you will save a lot more on your car insurance.
  • Increasing your deductible: By increasing your deductible you will pay less each month and year on car insurance. The obvious drawback is that you will receive less of a payout after an accident.
  • Shopping around: Finding the best car insurance for bad credit in Kentucky largely revolves around shopping around. Each insurance company uses its own pricing algorithm when calculating a premium, which means not every company penalizes bad credit drivers the same way. Sometimes to save money on car insurance, you simply need to switch companies.
  • Comparing discounts: The amount of money you save with a particular discount varies with each company, but to know just how much you will save may require you to pick up the phone and speak with an agent. Companies normally only give a range online for how much you will save but not the actual amount. While you are at it, compare discounts you can both take advantage of right now, and ones you will be able to use further down the line.
  • Driving safe: Driving history plays a huge role in premium costs. Numerous speeding tickets and at-fault accidents will not help lower your car insurance bill. To help keep you on track, we recommend choosing a company that offers a usage-based car insurance discount. With the help of your smart-phone, the insurance company will monitor your driving behavior. If it likes what it sees it will give you a discount.

Frequently asked questions

Will I get a credit check when I obtain an insurance quote?

You will get a credit check but it will not hurt your credit score. Credit checks only hurt your credit score when you are looking to take out a loan or line of credit. This is the difference between a soft and hard credit check.

Are there insurance companies that specialize in bad credit drivers?

Looking for bad credit car insurance in Kentucky? They do not really exist, but you will receive a better rate with some insurance companies over others. This is because each company has its own pricing algorithm when calculating premiums, which means some companies weigh the importance of credit score more so than others. Always shop around to save money on your car insurance.

Methodology

Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, varied credit tiers and the following full coverage limits:

  • $100,000 bodily injury liability per person
  • $300,000 bodily injury liability per accident
  • $50,000 property damage liability per accident
  • $100,000 uninsured motorist bodily injury per person
  • $300,000 uninsured motorist bodily injury per accident
  • $500 collision deductible
  • $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverages that meet each state’s requirements. Our base profile drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually.

These are sample rates and should only be used for comparative purposes.

Credit: Rates were calculated based on the following insurance credit tiers assigned to our drivers: “poor, average, good (base), and excellent.” Insurance credit tiers factor in your official credit scores but are not dependent on that variable alone. The following states do not allow credit to be a factor in determining auto insurance rates: CA, HI, MA

Written by
Lauren Ward
Insurance Contributor
Lauren Ward has nearly 10 years of experience in writing for insurance domains such as Bankrate, The Simple Dollar, and Reviews.com. She covers auto, homeowners, and life insurance, as well other topics in the personal finance industry.