You Cannot Hide Your Debt
They Care, You Care, Who Cares More About Your Debt?
Save Money On Your Insurance
Insurance companies may have started to care more about your debt than you do. Why is that? Insurance companies are starting to take risk more serious. If you have too much debt an insurance company may see you as a high risk factor.
Your financial life determines what kind of client you will be. If you carry too much of debt you could be considered a high risk. To keep claim costs down insurance companies prefer clients who are low risk.
Do It For Yourself
Another reason to pay your debt down is because of premium costs. You waste your money when you pay higher premiums due to high debt. In addition, high debt balances will lower your credit score. And you will pay more for your insurance when you have a bad credit score
Have you checked your insurance premiums lately? You may want to ask your agent if any rate increases are the result of bad credit scores or high credit card balances?
Insurance Company Logic
Insurance companies have to keep a reserve in order to pay out on claims. Having a client base who are low risk helps keep the claim activity and the reserve up. They charge higher premiums for high risk clients so they can offset any losses that may occur. Whether that is right or wrong is irrelevant, it’s just the way insurance companies do business. So it is in your best interest to do your best to work on your keeping your debt to a minimum.