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Credit Based Insurance Scoring

Virtually every insurance company incorporates some type of Credit Based Insurance Scoring methodology when determining the rate you are charged for all types of insurance. This page is designed to provide a better understanding of what this means to you.

According to The Ohio Department of Insurance, "Insurance companies use certain data during the underwriting process to determine premium amounts. Examples of the data used include the type and use of vehicle, driver age and gender, as well as where an individual resides. Calculating an individual insurance score, which includes credit history information, could be part of the underwriting process.

Credit-based insurance scores use certain elements of an individual's credit history to predict how likely they are to have an insurance loss, as research shows there is a correlation between credit characteristics and insurance losses."

For more information about Credit Based Insurance Scoring from The Ohio Department of Insurance; click here.

Quoting

Insurance Scoring is usually accessed whenever you request a quote from anyone...certainly here, at this agency. Please keep this in mind when requesting a quote for auto, home, renters, or condo insurance. More than likely, each company has some verbiage explaining the process. Some are very simple...and some are more elaborate. 

Below are examples of the language used by a few of our carriers:

Progressive Insurance

"Like most insurance companies, Progressive uses information from you and other sources, such as your driving, claims and credit histories, to calculate an accurate price for your insurance. New or updated information may be used to calculate your renewal premium.  Its Privacy Policy explains how Progressive discloses and protects your personal information and how you may access and correct it." To view the Privacy Policy; click here.

Western Reserve Group

"Prospect has been informed Agency representation will order credit based insurance score, claim history report, motor vehicle record and acknowledges consent." 

Auto-Owners Insurance

"Auto-Owners Insurance Group companies may use Insurance Scoring, in part, to determine the rate you are charged for insurance. A credit report will be ordered on you and the resulting Insurance Score may be used as an additional criteria for rating purposes. 

Information about you and your credit experiences, such as your bill-paying history, the number and type of accounts with late payments, collection actions, outstanding debt, and the age of your accounts is collected from your credit report. Using a statistical program, specialized companies compare this information to the credit performance of consumers with similar profiles.  An insurance Scoring system assigns points for each factor and a final score is computed. 

It is in your best interest to check your credit history to determine the accuracy. If there is derogatory information in your credit record, credit reporting companies are required to proved you with this information.  A copy of your credit report can be obtained by contacting LexisNexis Consumer Service Center at (1-800-456-6004).

Auto-Owners Insurance Group companies cannot use credit history or an Insurance Score for any arbitrary, capricious or unfairly discriminatory reason.  Additionally, credit history or an Insurance Score based wholly or partly on residence, sex, race, color, creed, occupation, income, physical handicap or disability of an applicant or insured is prohibited." 

Any Questions?

Feel free to call our office if you wish more information. We want to make sure you're comfortable with the process, and we're happy to help.

 

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