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  • Writer's pictureCrosswinds Insurance

What is an insurance score?

An auto insurance score or home insurance score is a three-digit number, used to predict your odds of filing a claim. It’s mostly calculated from your claims history and your credit score, so it’s also referred to as a “credit insurance score.” Credit information can be very predictive of future accidents and claims which is why Progressive, and most insurers, may consider this information in determining your rate in most states.

Is an insurance score the same as a credit score?

No. An insurance score also reflects your insurance claim history. It tells a part of your story, but it’s not necessarily a disqualifier for insurance. In fact, Progressive won’t deny you an auto policy based on your insurance score.

An insurance score is a combination of your claims history and credit score.

What factors besides credit determine my insurance score?

In addition to viewing your credit report, insurance companies consider your claims history. Every insurer has their own unique method for calculating your score—they may even look at info gathered from policyholders with similar characteristics to you.

Why does my credit affect my rate for car insurance?

Studies have revealed a link between credit history and insurance claims. The data suggest that a person with a lower credit score is more likely to be involved in an accident and file a claim than someone with a higher score. But your good driving history matters too, so you can still get a competitive rate from Progressive if you’ve had credit issues.

What is a good insurance score?

Scores range between a low of 200 and a high of 997. The higher your score, the less of a risk you are to an insurance company and the better your rate will be.

  • Good: 776-997

  • Average: 626 -775

  • Below Average: 501-625

  • Poor: Under 500

How can I improve my insurance score?

Insurance claims history

Drive as safely as you can to avoid accidents and violations. Here are four tips for safer driving:

1. Park in a garage

If possible, park your car in a garage or covered area to avoid weather-related damage.

2. Drive the same route every day

Data shows that new, unfamiliar roads aren’t as safe.

3. Avoid driving from midnight – 4 a.m. on weekends

This can be the most dangerous time on the roads.

4. Check your tire tread

Make sure your tires aren’t worn out because low tread can be dangerous, especially in the snow. To check, try the penny test and insert an upside-down penny in your tread. If you can see all of Lincoln’s head, you need new tires.

While some home insurance claims may be impossible to prevent, here’s how you can reduce the damage from or better avoid certain incidents:

  • Fire: Keep a fire extinguisher on hand and smoke detectors on every floor. Check for frayed wires and electrical cords.

  • Theft: If you don’t have a security system, make burglars think twice by leaving a light on when you’re away to make your home look occupied. Also, make sure all doors and windows are locked, including the garage.

  • Accidents: Keep your property safe for walkers by making sure your driveway, sidewalk, and steps are well maintained and not icy.

  • Wind damage: Patio furniture, tools, and toys should be stored away if you’re at risk for high winds. Debris and loose tree branches should be removed.

Credit history

Even if you have a short credit history, you can raise your score by keeping your bank, credit, and other financial accounts in good standing. Simply make timely payments and maintain low balances on your credit cards in relation to their credit limits. Here are the five common elements of a credit score:

  • Payment history (35% of the total score): This is just paying your bills on time.

  • Credit utilization (30% of the total score): This is the percentage of available credit that has been borrowed. For instance, if your credit limit is $1,000 and your balance is $900, you are 90% utilized. The less utilized you are, the better your score.

  • Length of credit history (15% of the total score): Your credit history begins with the first credit account (secured or unsecured) in your own name. Keep in mind, if you file bankruptcy, or abstain from credit for a long period time, your credit history may only go as far back as when you started using credit again.

  • New credit (10% of the total score): Opening multiple credit lines in a brief time period indicates greater risk, particularly if you have a short credit history.

  • Credit mix (10% of the total score): Borrowers paying on secured loans (home, automobile) and unsecured lines (credit cards) will fare better than a borrower with only credit cards and no secured loans.

Remember, a better claims history and credit rating leads to a higher insurance score which means favorable rates on home and auto policies.

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