Get a free, no obligation personal loan quote with rates as low as 6.99%
Get Started You can apply with no effect to your credit score

When shopping around for a home, auto, or life insurance policy, you’ll be asked a series of questions about yourself, your home, or your car before obtaining a quote.

But what about your credit score? Will your insurance company also want to verify your creditworthiness before quoting you a rate for a policy?

Do Insurance Companies Check Credit In Canada?

Insurance companies use credit scores to determine your coverage and premiums charged. Your credit score is a reliable indicator of your financial health and risk in the eyes of your insurance provider. If you have a high credit score, you may benefit from better premiums with more coverage. 

Your credit score paints a picture of your creditworthiness. A good score typically means that you are responsible with your finances and are more likely to make timely bill payments. 

Since you’re responsible for making premium payments to keep your policy active, your insurance provider will want some form of assurance that you will pay on time. And your credit score will give them an indication of your ability to make timely payments

Your credit score may also determine the likelihood of you filing a claim. Insurance companies make money through the premiums they charge and want to minimize the number of claims they have to pay out. Someone with a low credit score may be more likely to file a claim.

While there are other factors that insurance companies consider when determining the price they charge for a policy and the coverage provided, credit scores are still among the more important ones. 

Find out what factors your credit score is based on.

What Happens If You Don’t Have Any Credit History?

If you haven’t had the chance to establish credit, then your insurance provider will not be able to use a credit score to determine your creditworthiness or financial health. Instead, they’ll have to go by any other available information about your financial position and risk level, depending on the type of insurance you’re looking to take out.

For instance, if you’re applying for auto insurance, your insurer may consider the type of car you drive, the amount of mileage you put on it each year, your driving record, and your age and gender. If you’re applying for home insurance, the insurer may want to know more about the age and condition of your home, where it’s located, the cost to rebuild, and how far it is from the nearest fire hydrant or hall, among other things. 

At the end of the day, an insurance provider does not always need to check your credit score to issue you a policy. They are obligated to make an underwriting decision and use any information available to them. 

Lookout

Loans Canada Lookout

Looking out for your best interest

Can You Refuse Your Insurance Company From Checking Your Credit Score?

Before an insurance provider can run a credit check on you, they will have to get your consent first. You can refuse to have your credit score checked if you so choose, and your insurance provider will still be obligated to provide you with a quote without it. 

That said, the lack of a credit check could impact the premium you are quoted. If your credit score is high, you could get a lower price on an insurance policy, so you may be doing yourself a disservice by not allowing the insurance company to check your credit score. 

How Can Insurance Companies Use Your Credit Information?

In order to use your credit information, insurance companies must abide by certain rules:

  • They must have consent to run a credit check on you
  • They cannot deny coverage based on your credit score or lack of credit
  • They must base their underwriting decisions on other information available to them if you have no credit 

Where Can You Check Your Credit Score?

In Canada, there are two main credit bureaus: Equifax and TransUnion. You can obtain a mailed copy of your credit report for free every 12 months from either one of these bureaus. Or, you can obtain a digital copy for a fee, which will give you quicker access to your credit report. 

You can also check your credit score from a third-party service provider, such as Credit Karma or Borrowell. 

Final Thoughts

It’s standard practice for insurance companies to request to check your credit score before determining how much to charge you for an insurance policy. A good score can result in a lower rate, and vice versa. But you don’t have to allow the insurance provider to run a credit check on you, especially if you don’t yet have any credit established. Just be aware that no credit check could impact the rate you’re quoted.

Priyanka Correia, BComm avatar on Loans Canada
Priyanka Correia, BComm

Priyanka Correia is a Marketing Coordinator and personal finance expert at Loans Canada. Priyanka completed her Bachelor's degree in Marketing at Concordia University and has published work that has been mentioned in various news media. She is passionate about money management and educating Canadian consumers about how to take control of their financial lives.

More From This Author

Special Offers

More From Our Experts

https://loanscanada.ca/wp-content/uploads/2017/09/ported-motgage.png
Porting A Mortgage | What Does It Mean?

By Bryan Daly
Published on June 11, 2024

Everything you need to know about porting your mortgage and when it's actually a good idea.

https://loanscanada.ca/wp-content/uploads/2017/12/Deed-in-Lieu-of-Foreclosure.png
Deed In Lieu Of Foreclosure In Canada: An Alternative To Foreclosure

By Lisa Rennie

A deed in lieu of foreclosure is when you agree to voluntarily hand over the deed to your home to the lender instead of going through a foreclosure.

https://loanscanada.ca/wp-content/uploads/2013/10/Condo-vs-house.png
Pros And Cons Of Buying A House vs Buying A Condo

By Lisa Rennie

What are some of the disadvantages and advantages of buying a house or a condo?

https://loanscanada.ca/wp-content/uploads/2024/06/Moi-Program-1.png
What Is The Moi Program?

By Savanna Craig

Are you wondering if the Moi program is worth it? Find how much Moi points are worth and where you can earn them.

https://loanscanada.ca/wp-content/uploads/2012/08/monthly-costs-of-owning-a-house-ontario.png
The Costs Of Owning A Home In Ontario

By Lisa Rennie

Wondering how much it costs to own a home? Let's look beyond mortgage closing costs and analyze exactly are the monthly costs of owning a house in Ont...

https://loanscanada.ca/wp-content/uploads/2024/05/best-time-to-buy-a-house.png
When Is The Best Time To Buy A House?

By Lisa Rennie

Learn how to determine whether or not it's a good time to purchase a house.

https://loanscanada.ca/wp-content/uploads/2018/01/power-of-sale.png
What Is A Power Of Sale For A Mortgage?

By Jessica Martel

A power of sale essentially allows the lender - not the homeowner - to sell the home if the borrower defaults on the mortgage.

https://loanscanada.ca/wp-content/uploads/2021/06/BC-Disability-Assistance.png
Do You Qualify For Disability Assistance In BC?

By Matthew Taylor

The BC Disability Assistance Program provides monthly disability assistance payments to people with the Persons with Disabilities (PWD) Designation.

Recognized As One Of Canada's Top Growing Companies

Loans Canada, the country's original loan comparison platform, is proud to be recognized as one of Canada's fastest growing companies by The Globe and Mail!

Read More

Why choose Loans Canada?

Apply Once &
Get Multiple Offers
Save Time
And Money
Get Your Free
Credit Score
Free
Service
Expert Tips
And Advice
Exclusive
Offers

Build Credit For Just $10/Month

With KOHO's prepaid card you can build a better credit score for just $10/month.

Koho Prepaid Credit Card