How are insurance premiums generally affected by credit scores in Ontario?

High credit scores can generally lead to lower insurance premiums because insurers often view individuals with strong credit as lower risk. This perspective is based on statistical analyses that suggest a correlation between creditworthiness and the likelihood of filing a claim. Thus, individuals who maintain good credit scores are often rewarded with reduced premium rates as a way to encourage responsible financial behavior and to minimize risk for the insurer.

In contrast, the other options fail to reflect this relationship. The notion that credit scores have no impact on premiums is inaccurate, as most insurers take credit history into account during the underwriting process. Similarly, lower credit scores do not result in refunds; rather, they may lead to higher premiums due to the associated higher risk. Furthermore, credit scores do not determine coverage limits; rather, they influence the pricing of the policy, not the extent of coverage available.