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.
What is an auto insurance score?
Also referred to as credit-based insurance policy rating, an auto insurance rating is simply a three-digit number which is used in forecasting your likelihood of filing insurance claims. The credit score that you get originates from the three principal credit bureaus and usually ranges between 150 and 950.
It is also important to note that this insurance rating has nothing to do with your driving history and once again shouldn't be related to credit rating. It's just auto insurance, score as such.
Who uses this?
These scores have become typical in the past couple of years. They are utilized by the largest auto insurers from across the world. Including GEICO, Allstate, StateFarm, USAA, as well as Summit General Auto Insurance. You will see that your scores may differ from one company to another. This happens because the variables utilized in determining the scores are also rather varied.
How your credit affects your auto insurance rates
There is no doubt that a large number of insurers make use of credit information in setting premiums. However, there are still a couple of other factors that come into play in these deals, including driving records 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 rating?
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.
What is an auto insurance score?
Also referred to as credit-based insurance policy rating, an auto insurance rating is simply a three-digit number which is used in forecasting your likelihood of filing insurance claims. The credit score that you get originates from the three principal credit bureaus and usually ranges between 150 and 950.
It is also important to note that this insurance rating has nothing to do with your driving history and once again shouldn't be related to credit rating. It's just auto insurance, score as such.
Who uses this?
These scores have become typical in the past couple of years. They are utilized by the largest auto insurers from across the world. Including GEICO, Allstate, StateFarm, USAA, as well as Summit General Auto Insurance. You will see that your scores may differ from one company to another. This happens because the variables utilized in determining the scores are also rather varied.
How your credit affects your auto insurance rates
There is no doubt that a large number of insurers make use of credit information in setting premiums. However, there are still a couple of other factors that come into play in these deals, including driving records 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 rating?
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 been an expert in auto insurance for the past 5 plus years. He has produced this article that exposes some underhand techniques insurance companies use to sell you sub-quality merchandise. Richard suggests to get your free information on car insurance now.
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