A persons insurance score is a snapshot of how big a risk someone is to insure. Insurance companies use it to determine if they will insure you and if so how much to charge you for that insurance.
There are several things in your insurance score. They include:
Here is a list of things that is not in your insurance score:
Your insurance score can determine how much you pay in premiums. The worse your score the more you will pay. You may even be denied coverage based on your insurance score.
It may seem unfair that your credit score affects your insurance score. However, there have been several studies done by insurance companies and those who have a bad credit score also have more claims.
Insurance is all about risk. If you are a higher risk to insure you will pay more than someone who is at a lower risk. The insurance companies want to make money just like everyone else.
Unlike your credit score you cannot receive a copy of your insurance score. If you feel that you were denied insurance because of your insurance score you can contact your agent or the insurance company and ask them why you were denied. By law if you ask they have to tell you.
There are things that you can do to actively improve your insurance score. They include:
If you are denied insurance or a loan you can talk to the company that denied you. Ask them for the agency that gave them your credit report. If you contact that agency, they must give you a copy of what they gave the company for free.
If you haven't yet applied for insurance or a loan you can still get a copy of your credit report. There are 3 companies that you can ask for your credit report from. However, they may require a small fee. Those companies and their phone numbers are:
The fact is just because you may have a bad insurance score now doesn't mean you can't improve it. The best way to do it is to improve your credit score. Visit the websites of the credit agency's above or call them now.
The following are a list of resources used to write this article:
Special thanks to Travelers for providing this information.