What Is an Insurance Score?

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What Is an Insurance Score? – Having a substantial knowledge of what an insurance score is can help you save money on your auto and homeowners insurance. Most insurance companies use different variables to determine the rate you will be charged on your insurance. These factors are taken into account based on your location, age, gender, ZIP code, and insurance score. Regardless of whether you are a new policyholder or you plan to switch insurers for better deals, your insurance score hurts the price you pay for your policies.

What Is an Insurance Score?

Whether you seek a basic or in-depth understanding of credit scores. You are in the right space to get all the information you need. We will be enlightening you on what an insurance score entails, why it is important, how it can be calculated, and other various tips.

What Is a Surety Score?

A surety score is typically a form of measurement most surety companies implement that helps them evaluate your likelihood of filing a claim in the event of a loss. Insurance Information Institute defined insurance scores as confidential ratings, These ratings are calculated by insurance companies based on the data obtained from your credit history.

Your insurance score is primarily used to determine the chances of you filing a claim in the future. Based on statistics, individuals with high credit scores are less likely to file a claim. This credit score is used by many insurers to create their rating system.

Score Range

The surety score range varies; it solely depends on the surety company you are working with. However, the average range of insurance score is usually between 100 and 999. For instance, Progressive uses a range between 200 and 997 to calculate insurance score.

Those with lower scores are observed to file more claims than individuals with higher scores. This denotes that, if you have a low credit score, you are considered a higher risk and should expect high premiums. But those with higher scores are less likely to file a claim and as such, pose a lower risk to an insurance company.

How Is A Score Calculated?

As mentioned in the opening paragraph of this article, most insurance companies use several factors to calculate your insurance score.  Many of these factors are also similar to what affects your credit score and because insurers review the credit score of policyholders, your surety score is most likely to be affected. Not all insurance companies make their rating system of surety score public; others may decide to do that according to state laws.

Nevertheless, the major factor that influences your surety score is your credit performance. Others include outstanding debts, length of credit history, and late payment. These factors also depend on your insurer’s writing process, the state you reside in, and any third-party companies your insurer works with.

Generally, if you have a credit score of;

  • 100-500- The rating is Poor
  • 501-625- The rating is Below average
  • 626-769-The rating is Average
  • 770 and above- The rating is Good

How to Improve Your Score

If you have a poor surety score, the good news is that there are several ways you can potentially improve your insurance score. With effective strategies and deliberate effort, we assure you that your insurance score will bounce back to life. We have helped to curate some strategies that would help improve your surety score;

Make Payments On Time:

This is the best way to avoid a poor surety score; ensure you pay bills on time to avoid late or missed payments. If you have the capability of paying the full amount you owe per month, it can help to keep your credit utilization rate low.

Payoff Outstanding Debt:

Perhaps, you have an outstanding loan or any other form of debt on your credit card; it is advisable to make a conscious effort to pay it faster.

Keep Credit Utilization Low:

The rate at which you use your credit card also affects your surety score. You can improve your surety score by keeping your credit utilization low.

With these few strategies, there is a 99.9% chance of improving your surety score if you follow them accordingly.

FAQs

What makes a surety score decrease?

Virtually anything can make your surety score decrease, and this includes things that affect your credit score. In essence, whatever makes your credit score worse will most likely hurt your surety score. If you do not make payments on time. If you have an outstanding debt on your surety payment, your surety score tends to decrease. Also, excessive credit lines and credit utilization rates can affect your surety score.

Is the home insurance score the same as the auto score?

Yes, your insurance score is typically the same whether your policy is home or auto insurance. Notwithstanding, your insurance score can differ from home and auto insurance depending on your insurer’s underwriting process. If your insurer also provides both home and auto insurance, your surety score may be calculated differently. The best thing to do is to have an understanding. Understanding of how your insurance provider calculates your surety score and how it can be improved upon.

How can I check my insurance score?

To check your insurance score, you can request from your insurance company you are currently working with. The first thing to do is to ask whether your insurance score will be used to calculate your premiums. This is from your insurer.  If you are still unsure of what to do, you can ask your insurance company to provide you with detailed information on how to know your insurance score.

It is important to note that, the way one insurer calculates a score is different from the way another would calculate. So, your score may turn out different from the one calculated by another insurer.