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What is a good auto insurance score

Odds are, if you live in the United States, you’ve heard of a Credit Score. But have you heard of your auto insurance score? While it’s much less used than a credit score, the information that influences your insurance score is also taken into account by your insurance company when determining your auto insurance rates. It is also one of the main reasons that shopping around for auto insurance can help you save a lot of money. Different companies use different formulas to determine what a person will be paying on their premiums. Using the free quote tools on this website is a fantastic way to save money and get the best prices for car insurance available. Learning more about what an auto insurance score has value. Read on to learn more about how your score is calculated, how to find your score, and ways to improve it. 

What Is An Insurance Score?

An auto insurance score also called a credit-based insurance score, is similar to a credit score. Instead of helping estimate your likelihood of being able to pay back a home mortgage or personal loan, it estimates your risk of getting into an accident or placing an auto claim. People who are determined to have higher risks can often pay more overall on their auto insurance policies.

Insurers have found a connection between credit scores and accident likelihood, so some auto insurers look at both your auto insurance score and your credit score. In some states, like California, Hawaii, and Massachusetts, this is not allowed, so the check is not universally performed. In states that do check a person’s credit score, improving that credit score can help them save money on their car insurance policies.

Your credit history can be a large portion of your auto insurance score in some states. But, it’s not all of it. Beyond your financial history, other factors auto insurance score and thus influence your auto insurance rate: 

Age - If you’re younger than 25, you’re considered a higher risk. Insurers consider young drivers less experienced and more likely to take risks behind the wheel, and thus more likely to file a claim. 

Vehicle Type - Vehicles with a higher Manufacturer Suggested Retail Price (MSRP) and higher-performance vehicles are more likely to lead to expensive premiums due to their high cost of replacement. 

Location - The state or city you live in can influence your rates due to insurance being independently regulated by state governments. Some states, such as Michigan, require higher levels of minimum coverage, which leads to more expensive rates. If you reside in a densely populated area, you may also see higher average rates. 

Driving Record - Every insurer in every state uses driving records to determine auto insurance premiums. Records of DUIs, reckless driving citations, and speeding tickets can all have significant impacts on premiums. Most insurance companies will base their evaluations on incidents that have happened in the past three to ten years. 

Claims History - Similar to your driving record, your insurance claim history is a primary contributor to car insurance rates. Being found at-fault after an accident, much like a new DUI or speeding ticket, could cause your premium to jump by a few hundred dollars every six months. These accidents also stay on your record for a while, around three to five years.  

Homeowner & Marital Status - Though these statuses have smaller impacts on your score overall than other factors, they can still lead to lower auto insurance rates. Homeowners and married couples are usually seen as less risky and more financially stable to insurance companies, so they see slightly lower rates than single renters. On average, a married person pays around $40 less than a single person. Homeownership also sees the benefit of bundling insurance rates for some policyholders, which can save money beyond your auto insurance score. 

What Is A Good Auto Insurance Score?

Similar to your credit score, your insurance score will fall on a sliding scale, with a higher number meaning you’re a lower risk. Unlike your credit score, which is weighed on the same scale across credit bureaus, your insurance score’s scale will vary between the three companies that generate it.

The two companies, and scales, are:

  • Fair Issac Corporation - Their score ranges between 250 and 900. If your score with FICO is above 700, it’s considered good.
  • LexisNexis - Formerly called ChoicePoint, their score ranges from 500 to 997. If your LexisNexis score is above 776, it’s considered good. 
  • Transunion - Their score ranges from 300 to 850. They do not specify what is considered good within their range. 

Nothing is uniform. It’s likely that your score will vary between the three providers, and your insurance company will likely have a different guideline for what it considers a good score. 

How To Get Your Auto Insurance Score

Another difference between credit reports and auto insurance reports is you are not entitled to a free auto insurance score. Luckily, you don’t need to track your auto insurance score as closely as your credit score, only when you’re shopping for new car insurance. 

If you’ve always paid your bills on time and have never filed a car insurance claim, it’s likely that your score is high. But, if you want to know for sure, you can contact FICO, LexisNexis, or TransUnion to get a solid number.

Why Does My Auto Insurance Score Matter?

Your auto insurance score matters most during the insurance rate process and the underwriting process. During the rating process, your insurance company will be deciding what to charge you and whether or not to offer you a new policy. During the underwriting process, your insurer is evaluating whether to renew your existing policy. The higher your score is during the rate and underwriting processes, the greater chance you’ll have to be offered a policy and discounts. Since different companies use different formulas to determine your rates, using the free insurance quote tools here can help you save. Professionals recommend that you check with at least three companies for quotes every year or two to ensure that you are getting the best rates.

Steps to Improve Your Auto Insurance Score

Many of the factors that raise your auto insurance score will also raise your credit score. As your credit score goes up, your auto insurance score usually does as well. That said, here are some of the fastest ways that you can increase your auto insurance score:

  • Pay Down Debt - If you are using more than 30% of the credit offered to you by credit card companies, it’s likely that this is hurting your score. Work to pay down your debt so that you are using no more than 30% of your overall credit at a time
  • Make Your Payments On Time - Utilize autopay, or set calendar or phone reminders to keep yourself on track to pay your bills on time. A history of on-time payments will reflect well on both your credit score and your auto insurance score. 
  • Keep Unused Cards Open - Even if you have paid off a credit card and don’t plan to use it again, keep it open. Keeping these older cards open will make your credit history longer, which boosts your score. It also keeps your credit limit higher, giving you more leeway with the 30% number discussed above. 
  • Drive as safely as possible - Not all accidents are preventable, and not all insurance claims come from accidents. But, avoiding speeding tickets and taking fewer risks on the road will not only save you money on insurance and fines but will improve your driving history and up your score. 

Other Ways To Save

If you have seen improvement in your credit score or your insurance score, you can contact your carrier to let them know and see if you can get lower rates on your auto insurance if you choose to renew. Either way, it is a smart plan to get quotes from multiple companies every few years. You can get the best prices for car insurance available on this website, and there are other ways you can save as well. Many car insurance providers offer discounts for good students, good driving, paying in full, safety features on your vehicle, and more. Keeping more money in your bank account can help bring peace of mind. Some people also find that the needs they have for auto insurance change as time goes by. You may, for example, find that your vehicle has decreased in value and you no longer need some coverages. For people who are leasing their vehicle, at a certain point you may decide that you no longer want a lease gap insurance, which covers the difference between the value of your car and what you well on it. Regardless of the type of insurance plan, you are looking to purchase, you can get quotes here from the best insurance companies in the industry.

Final Notes

Creating a balance between customer service, premium costs, and policies that suit your needs is essential. The articles and tools here can help you do this. Each quote can be done in less than 10 minutes, and you could save hundreds of dollars on the best auto insurance policies out there.

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