Blogs Car Info Our Show Deals Mechanics Files Vehicle Donation

Car Insurance Question

I moved recently from NY to NC and have just had my policy moved to NC. Insurer is Liberty Mutual.

I received the policy in the mail. Then, two days later, I received something from them called “North Carolina Automobile Policy Application”. Apparently you are issued a policy based on the fact that you’re already a customer but you still have to sign an application for the new state.

Basically, this seems to be some sort of credit check. At the bottom there is a box you can check "Yes or “No”. It was already checked as yes by THEM. Here’s what it says:

“If I do not qualify for the company applied to but do qualify for an affiliated Liberty company at rates different than originally quoted, please issue my policy in that company. I also request that any amount paid with this application be applied toward the premium on the policy to be issued by the affiliated company.”

Well, I’ve been a customer for 25 years. My credit stinks but I’ve ALWAYS paid my car insurance. I have to return this form but don’t want to be thrown with some other company.

I’m very unnerved by this. Any advice would be helpful.

Well, let’s analyze this situation. It appears that Liberty Mutual operates under several different names, at least in the state of North Carolina. And, it appears that the various Liberty Mutual entities have differing standards and differing rates.

You say that you don’t want to be “thrown in with another company”, but–in reality, what are your options? If you are wary of this…“bait and switch” on the part of Liberty Mutual, then your obvious option is to apply for insurance with a totally separate insurance company (at a different rate), but you tell us that you don’t want a different insurance company. And, if you do fill out the Liberty Mutual form, you may wind up with a new iteration of Liberty Mutual (at a different rate). In other words, you may wind up with another insurance company no matter what you do.

If I were you, I think that I would just go with Liberty Mutual for the time being, since you do need immediate insurance coverage. If the rate turns out to be onerous, and if you are switched to a different Liberty Mutual company, then you could shop around for new coverage after making the first payment to the “new” Liberty Mutual company.

Who knows? You just might luck out, and you might be able to be retained by the same version of Liberty Mutual that you had previously. But, if not, you will be covered by a different company, no matter what you do. But, if I were you, I would fill out that Liberty Mutual form and see what results from that.

And, no matter what transpires with your car insurance, you need to take steps to improve your credit rating. A credit rating that “stinks” (your term) will wind up having negative fallout in terms of car loan rates, rates on other types of loans, the ability to obtain a mortgage, the ability to be hired by some companies, and–as you have found out–the ability to obtain certain types of insurance.

Improving your credit rating requires a huge amount of self-discipline, but it can be done. And, it is probably one of the most important things that you can do in terms of improving the overall quality of your life.


I appreciate your well thought out answer and you taking the time to answer me. Thanks.

You are correct; its very important to improve a bad credit rating. I’m also aware of what they use it for these days. That being said, I don’t buy into this particular policy and never will. In fact, it ought to be outlawed.

Denying people jobs because of poor credit is asinine and always will be. The only time it ought to be used is with jobs involving the handling of cash, where I’ve heard its used because they feel the person might steal to settle the debt. The “it shows your character” is a lot of bunk. Plenty of great people and fine workers have debt problems. Like most people my debt issues involve credit cards and in my case also a hospital bill I cannot afford to pay. So I shouldn’t be allowed to drive? Or have to pay $1,000 instead of $500? When the wolf is at the door you pay the important bills first; car insurance, electric, food, etc. My bad and I realize that; I’m not trying to make excuses. That being said it shouldn’t have anything to do with the car insurance of an existing customer.

I’m taking your advice on the insurance; I’ll just go with the flow. My fear, however, is that they use these “credit checks” simply as an excuse to jack up the rates of an existing customer without out any need to. I always pay my bill on time and have never put in a claim.

And the sad thing is that I knew the minute I did the right thing and told the company I moved that this would happen. I should have just left well enough alone.

Thanks again.

If you don’t understand what this means, call Liberty Mutual and have them explain it to you. You can always search for new insurance. Ask your neighbors and work colleagues who they recommend and why. Maybe you’ll find a better deal, or maybe Liberty Mutual (or their affiliate) will be best.


Thanks for your answer. I plan to take a trip to the regional office on Monday; luckily for me its close by. Up until this point its all been by phone to some nameless call center and they mailed me my policy and application. What kills me is they didn’t spell my street correctly (I was very clear as to how its spelled) and have to go anyway to get everything reprinted; you can’t get a DL here without insurance that has the exact address.

One reason I don’t want to ask them about it is because I don’t want to put any ideas in their heads; it does say that they MAY do a check, it doesn’t say definitely. So I feel as if I ask, they’ll definitely do it.

Go to an insurance agent. Forget the other ways. He can make sure that you will pay only one policy and will give you the prices right away.


That’s a good point too. The phone has its convenience and I assume the folks on the other end are licensed agents, but the local face to face approach may be the best way to go.

Give them the opportunity to do the right thing. If they don’t, it’s better to know that before a claim is on the line.

First, make sure you don’t pay any money to one of those “credit repair” scams. Trust me, they are ALWAYS scams. If you want to fix your credit and don’t know how, you will need to hire a certified financial planner. You can find a certified financial planner at .

Second, you don’t have to handle cash to steal from a company. If you work in a warehouse or work as a purchasing agent or a receiving clerk, wait tables, bartend, etc., you can steal from your employer. Checking your credit report is simply a part of the information age. Your insurance agent needs to know whether it is safe to trust you with an installment plan or whether they should charge you up front. These days, taking good care of your credit is part of being a responsible adult.

Please don’t get me wrong. I know life happens. I know people get laid off and they fall behind with the bills. People lose their homes and sometimes declaring bankruptcy can be the best choice. So don’t think I am judging you. I am not. I am just saying companies have a right to avail themselves of information like credit scores on prospective customers. It is a responsible business practice and it is the new reality in the information age.

Fixing your credit isn’t as hard as you think. Find yourself a certified financial planner and find out what you need to do. Just make sure it is a legitimate CFP and not a scam where you will only lose your money. I wish you the best.

At least they will know that you exist. The telephone is a device that was invented to prevent communication. I just saw a Dateline TV show where the 911 DISPATCH center forgot to DISPATCH the police cars to look for a kidnapper.

Three people called two centers to report who the kidnapper was. One just reported where he was, which must have seemed like helpful information at the time. Don’t live near a county line, I guess.

I asked a Lompoc Ca. Allstate agent a question and he figured out the correct answer for me. He showed that he was well trained and experienced. D-Day insurance.


I appreciate your answer and advice. All true. Just one thing:

“I am just saying companies have a right to avail themselves of information like credit scores on prospective customers.”

I’m not a prospective customer. I’ve been a customer for years. And, I’ve been paying on an installment plan for years. My credit has never affected me paying my car insurance or paying it on time. Its not even a great deal of money; old car, liability only.

It is true. We live in an age where people do everything over the phone or on the computer.

In that case, they would be foolish to risk losing your business over your credit report. They should place more weight on your customer history. I hope they are smart enough to do that. On the other hand, the fact that you only carry liability coverage might mean they don’t really care if they keep you.

Keep in mind that laws vary state by state. One state might require liability only, while another might require more liability coverage and personal injury protection. That might explain the difference between your old rates and your new rates.

Nearly all insurers base rates partially on credit scores. As others mention, visit a multi-line agent in person and don’t buy insurance online. Long term customers sometimes get better results in the claims process, especially if you contact supervisors to complain about a field appraiser.

With an agent you should know that 30-50% of your premium is agent commission…

Get a quote, online, from Geico. What do you have to lose?

I’d like to know if anyone ever received one of those credit check things and didn’t respond. I mean an existing customer like me who has had insurance for years with the same company.

I’d call Liberty Mutual and ask them what’s going on before doing anything. This one doesn’t smell right to me.

I just pulled all three credit reports and Equifax had a Liberty Mutual inquiry on it from about a week ago. Now, there is no way I will ever send in that form. They went and did it anyway. Thanks for the help folks.

Just because they looked at your credit you are going to give up? Why not wait to see the quote? It might still be a reasonable quote if they don’t place too much weight on your credit score. There is no reason not to find out what rate they end up offering.