Knowledge Bytes
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Why use an independent agent?
Independent insurance agents are able to choose from a variety of different insurance companies to provide you with the best insurance coverage at competitive rates. We represent you, the client, instead of any one insurance company. We compare policies, rates and coverages among a number of companies to provide you with an insurance package specially designed to meet your needs.
Are You Eligible for Discounts?
Many of our carriers offer money-saving discounts including:
- Senior Drivers
- Multi-Car Households
- Auto & Home Packages
- Association members like teachers, nurses, dentists, landscapers
- Good Student
- Accident/Claim Free
Insurance Scoring
How does the use of an insurance score help me?
The use of insurance scores allows insurance companies to give better rates to customers who are less likely to have losses. The use of credit-based insurance scores has allowed more companies to offer more products to more people. Since insurance scores have been used, competition in the auto insurance market has increased significantly – leading to more choices for consumers. The more competitive the market is, the more you as a consumer will benefit. In Addition, the use of credit-based insurance scoring has led to an expansion of eligibility for insurance. There are fewer rejections for underwriting reasons, because use of insurance scores has allowed insurers to write more business.
An insurance score is a number, ranging from 100-900, that predicts the future loss of an individual insurance policyholder or applicant. It is not a credit score. A credit score is also a number, generally ranging from 300-850, but it predicts the likelihood of future delinquency on credit accounts of a credit prospect or customer. (A credit report is a summary, produced by a credit bureau, of the data they have on file for a particular consumer.)
One of the benefits of a competitive marketplace is that every company differs in how and why they use insurance scores. Insurance companies that use credit information find it helps supplement the underwriting picture so more accurate and precise underwriting decisions are made. This promotes a more competitive market resulting in more affordable rates.
How is an insurance score assigned?
Generally, an insurer sends an inquiry to one of the major credit bureaus. The credit bureau then conducts a process in which specific credit report attributes are input into the model that then produces a score. The score is returned to the inquiring insurer. An insurer can use the score in a variety of ways in its decision making process.
Insurance companies have learned that insurance scores are an accurate predictor of future loss likelihood.
Does your income or address have an impact on your insurance score?
No. The following information is NOT used in any insurance score models:
- Income
- Ethnic group
- Religion
- Gender
- Address
- Marital status
- Nationality
What can you do if you discover mistakes on your credit report?
The FCRA gives consumers the right to challenge information in their credit report they believe to be inaccurate. If the information is found to be inaccurate, the credit bureau is required to promptly correct the error. Addresses and phone numbers of the three major consumer credit reporting bureaus are listed on our website.
What can I do to improve my credit scores?
An insurance score is a snapshot of your insurance risk based on information in your credit report that reflects your credit payment patterns over time, generally with more emphasis on recent information.
Here are a few things you can do to improve your credit score:
- Pay bills on time. Delinquent payments and collections can have a major negative impact on an insurance score.
- Keep balances low on unsecured revolving debt like credit cards. High outstanding debt can affect an insurance score.
- Apply for and open new credit accounts only as needed.
- You can improve you insurance scores over time by using credit responsibly.
It is a good idea for you to periodically obtain a copy of you credit report from the three major credit bureaus to check for any inaccuracies. See below for more details.
The federal Fair Credit Reporting Act (FCRA) (15 U.S.C. 1681 et. seq.) provides numerous consumer protections. These include:
- The right to obtain a free copy of your credit report if you are adversely affected (for example, denied coverage) based on information in your credit report
- The right to contest any inaccuracies in your credit report and to have inaccurate information removed The use of insurance scores allows for objective, consistent and accurate underwriting and/or pricing. With the use of insurance scores, subjectivity is minimized as a formula is applied that evaluates empirically derived data, allowing for an impartial underwriting and/or pricing decision.
- Equifax
For a copy of your report, call 1-800-685-1111. - Experian
For a copy of your report, call 1-888-397-3742. - TransUnion
For a copy of your report, call 1-800-888-1213. - Consumer Data Industry Association (CDIA)
For information on the credit report dispute resolution process, call 202-408-8011
Helpful Links
- Detailed crash test reports:
http://www.nhtsa.dot.gov/ - Wisconsin Department of Transportation:
www.dot.wisconsin.gov - Free Home Inventory Software:
http://www.knowyourstuff.org/ - Personal credit report and credit history:
www.myfico.com
www.annualcreditreport.com - Keep track of your financial records:
www.MyFinancialHouse.org