What Is A Good Auto Insurance Score? – The Ultimate Guide

Read the article to find out what is a good auto insurance score. Get all the answers to your questions with this ultimate guide.

Have you ever wondered if your auto insurance score is good or not? You have been driving in a great way and following all rules so what should your auto insurance score be? In order to understand these things, you first need to know as to what exactly is an auto insurance score?

For a lot of individuals, the rundown of variables affecting auto insurance rates have always been a puzzle. You most likely understand that factors like your area of residence, mishaps and your previous history can influence your rates. Be that as it may, you may not know that your credit record can also affect auto insurance rates.

Continue reading this article to find out the answers to all your queries.

What Is An Auto Insurance Score?

An auto insurance score is a three-digit number that insurance companies use to figure out how much of a liability you will be to the company if it provides coverage for you. In other words, this score is a means to determine your chances of filing for insurance. Your credit score and coverage history are two ways through which the insurance score can be found out. Therefore, it is rightfully also known as a “credit insurance score.”

Credit data can be prescient of future mishaps and cases which is the reason which is the reason why many safety net providers, may think twice about the given information before deciding your rate in many states.

Similar to credit scores, many insurance companies have presented their own formulas and methods through which they find out an individual’s auto insurance score. You should definitely contact your auto insurance providers to see how they determine the auto insurance scores.

Furthermore, you must remember that a low auto insurance score means high risk. Therefore, a high insurance score means that you will get a lower coverage dividend, vice versa a low score will lead to the possibility to get higher premiums.

Is There A Similarity Between Credit Scores And Insurance Scores?

The simple answer to this question would be, no.There is some apparent likeness between a credit risk score and an insurance score. For example, both these scores are determined through your present credit report information. Moreover, both these scores are measured with the help of a method given by FICO.

Despite these few similarities, there are some important differences that cannot be overlooked. A credit score was formed to figure out the possibility that consumers may be extremely tardy in paying back their dues on time. On the other hand, an insurance score model was created to determine the probability of “loss relativity” of any given person. Now, what exactly is loss relativity? It finds out whether the amount of your coverage claims corresponding to your dividends will be more or less than the usual cost.

In addition to this, an insurance score also indicates an individual’s insurance claim history. Thus, in a way, it can tell the insurance company some significant things about your life. You must also keep in mind that your insurance score does not necessarily matter for Progressive to give you an auto policy, or even deny it.

Although insurance scores are important, they are not the only thing that company’s use to determine things like pricing, or deciding if they will give you the coverage or not.

Furthermore, Insurance scores are utilized in various ways in contrast to the manner in which a credit grantor would utilize a credit score. Most safety net providers utilize an insurance score alongside an engine vehicle report, claims history report, home review and different sorts of data to decide if it is worth it to give you coverage.

Is There A Connection Between Credit History And Insurance Claims?

Has it ever crossed your mind as to why does your credit influence your rate for car insurance?

Research has shown that there is a connection between credit history and insurance claims. The information that we have reveals that an individual with a lower credit score has a greater chance to get caught up in an accident and issue a claim as compared to a person with a higher score. However, it must be kept in mind that a good driving history holds a lot of significance too. Therefore, despite having problems with your credit score, you can still end up finding an excellent cost from Progressive.

What Is A Good Auto Insurance Score?

A great insurance score implies that there are lower car insurance rates, whereas on the other hand, a bad one means that you will have to pay more. Now, the question arises, what really makes up a good score?

The three digit insurance score actually has quite a wide range. Thus, your insurance score can range from anywhere between 200 and 997. It must be understood that this score can vary on the basis of whatever formula your insurance company uses to find out your score. A good score ranges from 776 – 997, and an average score lies between 626 – 775. However, if you have an auto insurance score between 501 – 625, it means that you are below average. Lastly a number lower than 500 indicates a poor insurance score.

Companies generally look at your credit score to figure out how much money you will cost them and what are the chances for you to issue a claim. Therefore, know that a greater score means that you will have a better rate and the insurance company will see you as less of a risk. In other words, if you have a higher score, this indicates to the company that there are less chances for you to file a claim, thus you will be a better and more reliable option for them to insure. On the other hand, lower scores indicate the complete opposite.

Moreover, not all states license car insurance agencies to utilize FICO ratings as a means for deciding your dividend. California, Hawaii and Massachusetts do not allow insurance agencies to utilize FICO assessment to compute insurance rates, however they can at present use other aspects, such as your driving history, residential area, ZIP code and the manufacturer and model of your vehicle.

How Can You Check Auto Your Insurance Score?

Since all safety net providers utilize their own exclusive formulas and methods to figure your insurance score, they do not reveal that number to candidates. Thus, it is not a score that you can easily check like your FICO rating. Be that as it may, checking your credit score can help give you a glimpse of what your insurance score may be.

Keep in mind that you have many credit scores. Your financial assessment is determined on the basis of your credit report, yet there are three major companies that produce credit reports: Equifax, TransUnion and Experian.

Notwithstanding these three companies, there are additionally numerous scoring models: two basic ones are FICO and VantageScore. Inside those models, you’ll likewise observe different adaptations of your score.

The most ideal approach to find out your insurance score is to check your credit report. In any case, remember that your insurance score will be your FICO assessment joined with other data, similar to your cases and guaranteed history.

How Are Auto Insurance Scores Calculated?

Data provided from your credit report, claims and insurance history is all used to calculate your insurance score. Thus, aspects that affect your credit score will also affect your insurance score. These factors include those such as payment history, credit history, credit inquiries, and credit mixes etc.

In addition to this, your insurance history, including accidents and insurance claims, is also used to calculate your insurance score.

Aspects like employment history, income or marital status do not affect your insurance scores. It is often hard to figure out how exactly a company is calculating your insurance score because they do not disclose their method of calculation. A company might use data from your credit report coupled with their own method to find out scores, or they could use your current credit scores together with data regarding your insurance history.

Typically, having a good credit score for some time means that you will have a better insurance score and will deal with lesser insurance dividends.

How Can You Improve Your Auto Insurance Score?

It is important for you to see your credit scores to get an idea as to what your insurance score would be. If it is not what you expected it to be, do not worry! There are a few ways through which you can improve your insurance scores.

Make sure to pay all your debts on time, keep your credit usage low, and have multiple accounts in a really good condition. You could also keep your old credit accounts open. This indicates a settled and well established record.

In addition to this, you should also refrain from paying via your credit card after the due date and let your accounts go to collections. Moreover, it is also advised to refrain from a high credit utilization rate.

You could also drive as safely as possible and avoid accidents to ensure that your auto insurance rate improves.


Now you know what a good insurance score is and what you can do to improve yours.

John Otero

John Otero

John Otero is an industry practitioner with more than 15 years of experience in the insurance industry. He has held various senior management roles both in the insurance companies and insurance brokers during this span of time. He began his insurance career in 2004 as an office assistant at an agency in her hometown of Duluth, MN. He got licensed as a producer while working at that agency and progressed to serve as an office manager. Working in the agency is how he fell in love with the industry. He saw firsthand the good that insurance consumers experienced by having the proper protection. John has diverse experience in corporate & consumer insurance services, across a range of vocations. His specialties include Major Corporate risk management and insurance programs, and Financial Lines He has been instrumental in making his firm as one of the leading organizations in the country in generating sustainable rapid growth of the company while maintaining service excellence to clients.

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