How Can I Find Out My Insurance Score?

March 19, 2012

Your insurance score is a mix of your credit history and your accident claim history. Learn how to get your insurance score, and why it matters.

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Your insurance score, along with a CLUE report and several other factors, is used by insurance providers to determine how much you pay for car insurance. Certain parts of your credit history are used to determine your insurance score.

Why Insurance Scores Matter
Studies show that people who have a good credit history tend to file fewer claims—and therefore cost insurance providers less money—than those with poor credit. Because of this, many insurance companies base your insurance premiums on an insurance score derived from your credit history.

What Affects Your Insurance Score
A few specific factors from your credit history are mainly what determine your insurance score. The most important factor is your payment history. If you have a history of making your payments on time and in full, your insurance score is likely to be good. Other factors, such as your current debt and available credit, don't affect your insurance score as much. Your credit report information is weighted so that some of the data has a higher value percentage-wise than other data. The FICO insurance score utilizes the weighted value of data in your credit report, and breaks it down like this:

  • Payment History = 40%
  • Amounts Owed = 30%
  • Length of Credit History = 15%
  • New Credit = 10%
  • Types of Credit Used = 5%

You can see that your payment history and the amount you owe creditors has a far higher value in your insurance score calculation than the type of credit you use, i.e. credit cards, bank loans and so on. Insurance studies have determined that insurance risk and insurance scores are closely related statistically when calculated using credit score information.

In addition to insurance companies' in-house operations, the three major credit reporting companies are getting into the insurance score business as well. Equifax, Experian and TransUnion all developed insurance score services based on the FICO model. Choice Trust, a division of LexisNexis, has developed a scoring model called Attract, and offers consumers the opportunity to purchase a copy of their insurance score from their website.

As you may have already thought, things like driving experience, traffic violations, claims history, age of your vehicle, gender and where you live are also part of the insurance score calculation. Where it starts to get a little tricky is that using proprietary mathematical formulas, insurance companies and their consultants calculate in these and other factors to come up with your insurance score. These formulas are closely guarded secrets of their respective owners, although pressure is now being brought to bear that may force insurers to explain their formulas to consumers.

What the insurance companies are basically saying is that people with bad credit scores/low insurance scores file more insurance claims, making them higher risks to insure, and that they will have to pay higher premiums.

There is some good news for consumers, however. Some states, like California, prohibit the use of credit scores when determining insurability. Other states only allow credit reports to affect new insurance applications, while a few allow it to be used for those renewing their insurance as well. It would be advisable to check your local laws to see if and how your credit score is used in calculating your insurance score.

Finding Your Insurance Score
Each insurance provider has a slightly different way of calculating your insurance score, so your specific insurance score is wholly determined by the provider. You need to contact your provider to request information about your insurance score. In some states, insurance scores aren't used at all. Ask your insurance provider and they will be able to tell you either way.

Your CLUE Report
A CLUE report is a 7-year history of all the insurance claims you have filed. Obviously, the fewer claims you have, the less risky you are perceived to be, and the less you will pay for insurance.

Insurance providers use these two items, among other things, to determine how much of a risk you are and therefore how high your insurance premiums will be. Having good credit and a history of few claims will help you get the best insurance rates available.

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