Uncovering the Reason You Have an Auto Insurance Score
If you own a car, buying auto insurance is one of the most important things you ought to do. Driving without insurance increases your financial and legal risks if your car was to be involved in an accident. When selling insurance policies to you, many insurance companies base the amount of premiums that they will charge you, on your individual credit score. Why should the premiums you have to pay be related to your credit history, which has got no relation to your driving history? Perhaps this is a question that you might want to raise in such a case.
There is no doubt that a lot of people are still at a crossroads when debunking the true basis of an auto insurance rating and precisely why it needs to be a factor in automobile insurance. There is a close relationship in between auto insurance rating and the insurance coverage itself.
Exactly what is an auto insurance score?
Also known as credit-based insurance policy rating, an auto insurance rating is basically a three-digit number that is utilized in predicting your likelihood of filing insurance claims. The credit score that you get comes from the three main credit agencies and mostly ranges in between 150 and 950.
It is also important to note that this insurance score has got absolutely nothing to do with your driving record and once again should not be related to credit score. It's just auto insurance, score as such.
Who uses this?
These scores have become quite common in the past couple of years. They are used by the largest auto insurers from across the globe. This includes GEICO, Allstate, StateFarm, USAA, and Summit General Vehicle Insurance. You will notice that your scores can vary from one company to another. This is because the factors used in calculating the scores are also pretty varied.
How your credit rating has a bearing on your auto insurance rates
There is absolutely no question that a large number of insurance firms utilize credit information in setting monthly premiums. However, there are a handful of other variables that come into play in these deals, including driving history and market demographics.
Credit ratings are not in any case utilized in forecasting whether or not you'll have to settle your premiums. They are simply supposed to determine whether or not you meet the criteria to file a claim. This means that they are used when it comes to calculating any chance of the firm incurring losses in the future instead of your payment behavior in the near future.
However, the great thing is that you are able to benefit a lot from good insurance scores that are paired with good driving records. Therefore, you may get a lower rate than what you assumed you could get by only taking into consideration your driving records.
What is your auto insurance score?
The only way you can find out your insurance score is to visit your auto insurer. Most insurance companies calculate your score by using your credit scores sourced from the three main credit bureaus. TransUnion is one of the most preferred options. Again, just like I had stated earlier, vehicle insurance scores are in the form of a three-digit number ranging between 150 and 950, according to most credit scoring organizations.
If you own a car, buying auto insurance is one of the most important things you ought to do. Driving without insurance increases your financial and legal risks if your car was to be involved in an accident. When selling insurance policies to you, many insurance companies base the amount of premiums that they will charge you, on your individual credit score. Why should the premiums you have to pay be related to your credit history, which has got no relation to your driving history? Perhaps this is a question that you might want to raise in such a case.
There is no doubt that a lot of people are still at a crossroads when debunking the true basis of an auto insurance rating and precisely why it needs to be a factor in automobile insurance. There is a close relationship in between auto insurance rating and the insurance coverage itself.
Exactly what is an auto insurance score?
Also known as credit-based insurance policy rating, an auto insurance rating is basically a three-digit number that is utilized in predicting your likelihood of filing insurance claims. The credit score that you get comes from the three main credit agencies and mostly ranges in between 150 and 950.
It is also important to note that this insurance score has got absolutely nothing to do with your driving record and once again should not be related to credit score. It's just auto insurance, score as such.
Who uses this?
These scores have become quite common in the past couple of years. They are used by the largest auto insurers from across the globe. This includes GEICO, Allstate, StateFarm, USAA, and Summit General Vehicle Insurance. You will notice that your scores can vary from one company to another. This is because the factors used in calculating the scores are also pretty varied.
How your credit rating has a bearing on your auto insurance rates
There is absolutely no question that a large number of insurance firms utilize credit information in setting monthly premiums. However, there are a handful of other variables that come into play in these deals, including driving history and market demographics.
Credit ratings are not in any case utilized in forecasting whether or not you'll have to settle your premiums. They are simply supposed to determine whether or not you meet the criteria to file a claim. This means that they are used when it comes to calculating any chance of the firm incurring losses in the future instead of your payment behavior in the near future.
However, the great thing is that you are able to benefit a lot from good insurance scores that are paired with good driving records. Therefore, you may get a lower rate than what you assumed you could get by only taking into consideration your driving records.
What is your auto insurance score?
The only way you can find out your insurance score is to visit your auto insurer. Most insurance companies calculate your score by using your credit scores sourced from the three main credit bureaus. TransUnion is one of the most preferred options. Again, just like I had stated earlier, vehicle insurance scores are in the form of a three-digit number ranging between 150 and 950, according to most credit scoring organizations.
About the Author:
Richard Larson has specialized in San Jose auto insurance for the past sseveral years. Richard has produced this article that helps you in understanding and avoiding some underhand techniques insurance companies use. Mr. Larson suggests to get more information at insurance solutions now.
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