Did you know that approximately 90% of insurers use insurance scoring to help determine your premium? Insurance companies justify the use of insurance scores by citing studies that apparently show a positive correlation between credit scores and insurance claims. The use of insurance scores allows insurance companies to give better rates to customers who are less likely to have losses.
How does the use of an insurance score help me?
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.
What is an insurance score?
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.
Does your income or address have an impact on your insurance score?
Income and address do not play a part in the insurance score. Neither do the following criteria:
- Ethnic group
- Marital status
How to improve your insurance score
The best way to help keep your insurance score high (and your insurance premiums low) is to keep your credit score high. More about credit scoring and how to improve your score...
Take the same amount of caution with your credit score as you would with your driving - being responsible with both can save you serious amounts of money in insurance premiums.
Wisconsin residents can improve their insurance score! If you are interested in your insurance score or lowering insurance premiums, contact a knowledgebroker.