Insurance Scores Can Affect Premiums
Raise your hand if you have ever applied for a store credit card to receive an immediate 10-20 percent off of your purchase? I used to do that. At one time I had so many credit cards (mostly clothing stores) with open lines of credit that it was hard to close my wallet! Having open lines of credit along with other factors such as how much debt you carry and payment history affect your credit rating. Your credit score plus your claims filing history are factors that determine your insurance score.
Almost all companies use insurance scores to help determine your insurance rates. When it comes to buying insurance, one of the main things that the consumer is interested in is finding the best coverage for the lowest possible rates. At the same time, the insurance company is looking to insure clients who are considered low risk. The company wants to know how likely it will be that the potential insured will file a claim. Statistics show that a person with a low credit score is more likely to file a claim than a person with a higher credit score. Consequently, the lower your insurance score generally means the higher your premium ,and the higher your insurance score the lower your premium. An insurance score of 770 or higher is considered to be good while a score of 500 or lower is not so good. Ask yourself these questions: 1. How many insurance claims have I filed in the last five years? 2. How much debt do I have? 3. Do I pay my bills on time? All of these affect your insurance score. The best way to improve your insurance score is to lower your debt, pay off credit cards, cancel credit cards that you do not need, pay your bills on time, and try not to have a history of filing too many insurance claims!!
“What Is Your Insurance Score and How Does It Affect You?”, insurancescored.com, 8/21/19