Credit Based Insurance Scoring

Most insurance companies now include your credit score as one of the factors they evaluate, along with other factors like claims history and driving record.  Evaluating these factors helps insurers determine if you qualify for their underwriting programs and at what rate.  Your credit score is VERY important to an insurance company and helps determine your insurance premium.

Your insurance score is a snapshot of your insurance risk at a particular point in time.  It is a number based on the information in your credit report that shows whether you are more or less likely to have claims in the near future that will result in losses for the insurance company.  The higher your score, the less risk you represent.  The insurance company is also looking for your payment history and your ability to pay your bills on time.  If they have to chase you every month for payment, this costs them money and it will affect your rate.

Insurers use insurance scores along with other risk information, such a motor vehicle records, loss history reports, property inspections and application information to evaluate new and renewal auto and homeowner insurance policies.  It helps them decide “If we accept this applicant or renew this policy, will we likely be exposed to more losses than our collected premiums will allow us to handle?”

Call us today for more information on how your credit score affects your insurance premiums.

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