It would be good to write the calculation of insurance premium rates is more science than art. We always feel slightly more comfortable when we think people in white coats have left their fingerprints on something affecting our lives. Mostly we trust doctors and the medical researchers who invent these whizz-bang drugs that keep us alive. But it spreads to other activities until the magic rubs off. An example of this has been investment banking in which math geeks tried to model the world to predict which stocks would rise and fall. As the collapse of some of the banks in the recession that followed indicates, there are limits to what math-types can predict.

All of which should give us pause when we come to the question of insuring our vehicles. Ask anyone in insurance and they will proudly tell you the actuaries take all the guesswork out of predicting how many traffic accidents there will be and how much cash we need in the fund to pay out all the claims. Except that's not completely true. No matter how super the computer you use to crunch the numbers, there's always a random element. It's never going to be possible to predict the future with any real certainty.

So these actuaries start with where we live. This is the big zip code debate and, for liability cover, it's probably unfair. We then come to the next slightly unfair factor in all these calculations. Almost with exception, the insurers factor in your credit score. If you have a high score, you are eligible for the best rates. This can be a saving of more than a thousand dollars depending on the make and model of vehicle. Why do insurers think our credit scores are a predictor of the number of claims?

The answer comes down to a simple thought. Insurers believe that people who manage their finances responsibly are more likely to be safe drivers. In order words, taking care of your money is a character trait that translates to other activities like driving. In reality, people with only the mandatory minimum liability cover who are very short of money, are also likely to drive very defensively. If they have an accident, they will struggle to pay for the repairs to their own vehicle. This positively encourages them to avoid accidents. In this, remember the credit score is only one of many factors in profiling you and your driving record. So the calculation to produce a score is not the same used by banks and finance companies when they decide whether to lend you money. That said, you should still carefully monitor the accuracy of your credit history. It only takes one mistake showing a loan installment late or debt unpaid, and everyone who refers to credit scores is going to hit you with higher rates.

You have a statutory right to a free copy of your credit history from the three credit reporting agencies. If you find a mistake, you also have a right to have it corrected. So if your auto insurance quotes come in higher than expected, check your credit history. When any mistakes are corrected, you may not get cheap auto insurance, but it should be more affordable.