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Insurance Scores and You

Financial corporations collect and store our data on huge computers, and they use a variety of scoring models to generate credit scores and insurance scores that play a big part in determining what we pay for our loans and insurance.  If the scoring models predict you are less likely than average to default on a loan or have an insurance loss, you’ll pay less for your loans or insurance.  There are multiple scoring models in use by financial organizations and we don’t get the same scores on all of them. 

Insurance scores are similar to credit scores in that they measure how well you manage your money by examining your:  outstanding debt, bankruptcies, length of credit history, collections, new applications for credit, number of credit accounts in use, and timeliness of debt repayment.  Insurance companies use hundreds of these variables, put different weights on each of them, and add in your insurance experience (claims, cancellations, etc.) for their scoring models.  Each insurance company uses their own proprietary scoring model, they change them periodically, they express their scores differently (for one company your score could be a “1G” and another you could be a “700”), and they apply discounts differently based on the scores.  While some people are frustrated by all this, the good news is that most people pay less for insurance than they would if insurance scores weren’t considered. 

In general, people with high credit scores also have high insurance scores.  However, there could be some specifics of your credit past or your insurance past that one insurance company might favor while another does not.  This means even people with great credit scores could get varying insurance score discounts from the insurance marketplace.  The best way to take advantage of all this is to work with an insurance agent who has access to multiple insurance companies to find the ones that provide the best insurance score discounts for you (and other discounts), the insurance coverage you need, payment plans that fit your world, etc.  Contact your insurance agent to find out how to best navigate these waters!