What is credit based Insurance scoring?
PLease run over and give Kiley some comments on his first blog. He is a great insurance agent here in Colorado and would like to jump in the Rain with a little help from the rest of us.
Thanks so much!
What is credit based insurance scoring?
A credit based insurance score provides an assessment of your insurance risk at a particular point in time. Only credit related information is used in determining your score. This information reflects credit management patterns as insurers are only interested in how well you manage credit rather than how much money you make.
Credit information and insurance have a strong connection because insurers have discovered an individual’s credit information helps predict how often an insured is likely to file claims, and how expensive those claims might be. In fact, studies have found consumers with lower scores were up to twice as likely to file an insurance claim as those with more favorable scores. How the score is used varies greatly for each insurance company. Some only use it for auto insurance, some for home insurance only. Your score can an actual score similar to a credit score or it can be a simple discount or charge to your policy. Companies typically do not run your credit every year so if your situation has improved you can try to do credit reconsideration with the insurer.
Because of this factor it is imperative that new home purchases get a quote as soon as possible to determine their rate. One last comment…When your credit is run by your company it should not affect your actual credit score as it is considered a “soft hit” on your credit report.
This is first blog so please give comments either negative or positive. Kiley
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