What Is My Auto Insurance Score And How Is It Calculated?

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Some insurers will use an auto insurance score, also known as an insurance score, an insurance risk score, or a credit-based insurance score, to assess your application if you’re looking for auto insurance. Data from credit reporting agencies are used to generate your personal score. Depending on the scoring model, insurance scores can fall into a variety of ranges, but drivers with lower scores are more difficult to insure and are therefore likely to face higher premiums.

How does an auto insurance score work?

Your auto insurance score is a way for insurers to try to predict the future when it comes to your car insurance policy. Car insurance is necessary for owning a vehicle, and a car insurance score is part of the process when applying for an auto policy.  

It is used as a method to calculate the likelihood of you getting into an accident or having to fill out a claim. Auto insurance scores, or car insurance scores, are used as a way to decide rates based on your history. It helps insurers set rates for your auto policy. Your car insurance score is a number based on various factors, but the primary source of information is your credit history, which makes up the bulk of the score. 

Where can I find my auto insurance score?

Auto insurance scores can only be requested when you apply for an auto insurance policy. However, monitoring your credit score can help you better predict whether your auto insurance score will be high or low. 

How are auto insurance scores calculated?

Your insurance credit score is calculated based on information available in your credit report, accident history, and insurance history, including previous claims. 

Other factors can include your age and your zip code, as well as the car’s make and model. The insurance credit score calculation applies to both used car insurance and insurance for a new car, so it’s just one calculation during the auto policy process.

Here is a breakdown of how are FICO auto insurance scores are calculated:

  • Payment history – approximately 40%
  • Current level of debt – approximately 30%
  • Age of credit history – approximately 15%
  • New credit applications – approximately 10%
  • Mix of credit – approximately 5%

Can I improve my auto insurance score? 

The best way to improve your auto insurance score is by improving your credit score. The higher your credit score, the more positive an impact it will have on your auto insurance score. 

For used car insurance and new car insurance, improving your credit score can significantly influence your auto insurance for the better. You can boost your credit score in a variety of ways like paying your bills on time, reducing outstanding balances, and being a safe driver. Here are a few ways of improving your auto insurance score, which will ultimately allow you to get a better rate.

What is a good car insurance score?

Generally, a car insurance score of at least 700 is considered good. Anything above 700 is even better. 

Do all auto insurance companies check credit?

Yes, almost all insurance companies will check your credit before issuing an auto policy. Improving your credit as you practice safe driving is important when trying to raise your auto insurance score. Although you can’t be denied an auto insurance policy solely based on your credit score, most insurance companies do consider your credit score when determining rates. 

Currently, California, Hawaii, and Massachusetts are the only states that prohibit insurers from using credit scores as part of their calculations. Instead, auto insurance scores in those states are based on your driving history and the total number of miles you’ve driven, among other factors.

Boosting your credit score is important if you want to get the best possible rate for your auto insurance. 

Advantages of an auto insurance score

The main advantage of a good auto insurance score, or a car insurance score, is that it can reduce your monthly insurance payments. 

With a high auto insurance score, you can choose from a wider variety of auto policies and get more competitive pricing compared to when you have a lower score. 

Disadvantages of an auto insurance score

The disadvantage of an auto insurance score is that it reduces your options for auto policies. Even with the available options, you will likely be facing much steeper costs as a result of insurance companies wanting to minimize the risks of insuring you.

What is the difference between an insurance score and a credit score?

A credit score is based on your ability to repay your debts, but an insurance score predicts your chances of being involved in a future accident and filing a claim. It helps insurance companies estimate your risk to them as a driver. Insurance companies gather information from policyholders with similar credit characteristics and insurance claims to generate their scoring models.  

Start improving your auto insurance score today

Improving your auto insurance score comes down to a variety of different factors, but one of the fastest ways to improve your score is by increasing your credit score. Your credit score influences your auto insurance score a great deal, so taking steps to boost it will help. 

One way to kickstart this is by setting up auto-pay to avoid missing monthly credit payments. Late or missing payments could result in damaged credit and auto insurance scores. 

Credit Matters 

Your credit score plays a significant role in many aspects of your life, including the cost of your auto insurance. A good credit history along with a safe driving record results in the lowest auto insurance rates for drivers. Although bad credit leads to a lower auto insurance score, you can begin taking steps to improve your credit and boost both scores.

FAQ

What is an auto insurance score?

Your auto insurance score is a number used to determine your likelihood of filing an insurance claim based on the data in your credit report. 

Do car insurance companies check your credit?

The majority of car insurance companies check your credit along with your driving record and claims history. This data is used to calculate the risk they assume by providing you with coverage.

What is your auto insurance score based on?

Auto insurance scores are based on the information in your credit report. Similar to a credit score, they are calculated based on your payment history, debt, age of credit, and mix of credit.

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