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.
Right now there is no doubt a growing number of people are still at a crossroads when debunking the real basis of an auto insurance rating and just why it needs to be a factor in automobile insurance. There is a close relationship in between auto insurance rating and the insurance plan itself.
What is an auto insurance score?
Also known as credit-based insurance policy score, an auto insurance score is basically a three-digit number which is used in predicting your likelihood of filing insurance claims. The credit score that you get comes from the three main credit bureaus and mostly 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 very common in the past year or so. They are used by the biggest auto insurers from across the globe. This includes GEICO, Allstate, StateFarm, USAA, as well as Summit General Car Insurance. You will see that your ratings may vary from one company to another. This is because the factors used in working out the scores are also rather varied.
How your credit affects your auto insurance rates
There is absolutely no doubt that a huge amount of insurers work with credit information when it comes to setting premiums. Even so, there are a handful of other variables that come into play in these deals, including driving records and market demographics.
Credit scores aren't in any case used in predicting whether or not you will need to settle your premiums. They are simply supposed to determine whether or not you meet the criteria to submit a claim. This means that they are used when it comes to calculating any likelihood of the company incurring losses in the future rather than 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 will discover your insurance score is to see your auto insurer. Most insurance agencies determine your score by working with your credit ratings acquired from the three principal credit bureaus. TransUnion is one of the most preferred options. Once again, just like I had already mentioned, motor vehicle insurance ratings come in the form of a three-digit number ranging between 150 and 950, according to most credit rating 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.
Right now there is no doubt a growing number of people are still at a crossroads when debunking the real basis of an auto insurance rating and just why it needs to be a factor in automobile insurance. There is a close relationship in between auto insurance rating and the insurance plan itself.
What is an auto insurance score?
Also known as credit-based insurance policy score, an auto insurance score is basically a three-digit number which is used in predicting your likelihood of filing insurance claims. The credit score that you get comes from the three main credit bureaus and mostly 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 very common in the past year or so. They are used by the biggest auto insurers from across the globe. This includes GEICO, Allstate, StateFarm, USAA, as well as Summit General Car Insurance. You will see that your ratings may vary from one company to another. This is because the factors used in working out the scores are also rather varied.
How your credit affects your auto insurance rates
There is absolutely no doubt that a huge amount of insurers work with credit information when it comes to setting premiums. Even so, there are a handful of other variables that come into play in these deals, including driving records and market demographics.
Credit scores aren't in any case used in predicting whether or not you will need to settle your premiums. They are simply supposed to determine whether or not you meet the criteria to submit a claim. This means that they are used when it comes to calculating any likelihood of the company incurring losses in the future rather than 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 will discover your insurance score is to see your auto insurer. Most insurance agencies determine your score by working with your credit ratings acquired from the three principal credit bureaus. TransUnion is one of the most preferred options. Once again, just like I had already mentioned, motor vehicle insurance ratings come in the form of a three-digit number ranging between 150 and 950, according to most credit rating 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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