Everything You Need to Know About Your Insurance Score
The best way to safeguard yourself from the financial damage that might arise because of an accident or any risk is insurance coverage. Regardless of the benefits of insurance coverage, only a few individuals see the need to have one. The only way that you can tell if you are a high risk to insure is checking your credit score. Most people do not understand how insurance score is calculated. The next step after knowing how insurance score is determined is improving the figure. Here is a guide regarding your insurance score.
First and foremost, you should understand the meaning of insurance score. Just like credit score, an insurance score is usually used to determine the likelihood of filing a claim. Also, the amount of premiums that you will pay depends on your insurance credit score. If you want to pay less, you should ensure that you have a high insurance score.
Next, you should know how the insurance score is calculated. The figure is usually calculated using information from different databases. In most cases, information is usually obtained from Automated Property Loss Underwriting System (A-PLUS) and Comprehensive Loss Underwriting Exchange (CLUE). Insurance score usually range between 200 and 997. A figure around 770 is usually considered good while anything below 500 is poor. However, rating of insurance score usually vary from one policy to another. For instance, good is a figure around 700 for auto insurance.
In addition to the databases, several other factors go into insurance score. Based on the factors, you will know your chances of filing a claim. One of the key factors considered is stability rating or micro rating which is determined by your credit score, zip code, and infrastructure in your area. The other factors that determine your likelihood of filing a claim include the history of claims, insurance history, and driving habits. Individuals with bad driving habits usually pay more auto insurance premiums. Hence, you should ensure you build your credit score and improve your driving habits. In this website, you will learn more about the difference between credit score and insurance score.
Everyone needs insurance coverage. The first step to applying for an insurance policy is knowing your risk and insurance score. If you have a low score, you should focus on improving it so that you can enjoy lower premiums. The likelihood of your claim being approved will be high if you maintain a high insurance score.