|
Seo Master present to you:
An Explanation for the Weary Insurance ShopperWhen I worked as a personal lines insurance agent, frustrated consumers would ask me to explain insurance scoring to them on a daily basis. The misconception was that of a scary number that cost a lot of money and could ruin credit. Although a very complex subject, in this article I will shed some light on the basic concepts of insurance scoring and how your score affects you. I will also share a few tips that may help you improve your score. Basic Concepts of Insurance ScoringIn this section, the following topics will be discussed:
1. Currently, there are two types of insurance scores.
If you would like to know which type your insurance company uses, ask your agent. He/she should know or be able to find out for you. 2. Insurance Models Are Unique To Insurance Companies Insurance Scores Are Unique To You Insurance score models are different for each company and proprietary, so it is impossible to know all the factors included for any company in particular. There are hundreds of factors that go into creating an insurance score. Factors such as where you live, what car you drive, type of coverage you carry, when your policy renews, if you own your home, how you handle your money, age of the drivers, marital status, loss history, driving record, etc, etc, etc, are considered. There is even a company that factor in odd and even residential street addresses. Each company’s underwriting model is geared toward finding those viewed as their “perfect customer.” Some company models are more youth and/or senior driver friendly than others, and some are more forgiving toward those with blemishes on their reports. Other models will calculate a higher score simply for carrying more coverage or higher limits. The best thing to do is shop around and asks questions. You and your neighbor could live in the exact same house, drive the exact same car, carry the exact same coverage, and be offered very different rates from the same insurance companies. Find a company that is most friendly to your unique information. Honorable Recommendation: California Car Insurance RatesBest Car Insurance GuideWhen shopping, you may want to ask the agent:
If you feel you have nowhere to go but up, you may want to find a company that calculates a new score at each renewal. In most states, a new score at renewal can only be considered if the premium is reduced. In this case, it would work in your favor to have a new score calculated at every renewal. 3. Policies That Utilize Insurance Scoring and the Quote ConnectionPersonal lines auto and home policies use insurance scoring for underwriting approval and rating. Some companies use scoring for auto only, some home only, and others use scoring for both. Although heavily disputed, it is legal for insurance companies to use insurance scoring of some type in most states. Typically, insurance companies will honor rate quotes for only 30-90 days because information could change on both sides during that time period. On the company side, rates and underwriting rules can change. On the customer side, loss history, driving record, and insurance scores can change. Your score can change every 90 days. If you are not happy with a quote you receive, you may want to request a new quote 91 days later. A new insurance score will be calculated with the updated premium, and you could be offered a better rate. How Your Insurance Score Effects YouIn this section, the following topics will be covered:
1. Credit Based Insurance Scores and Your Credit Score An insurance score is a numerical system intended to predict the risk of a loss for insurance companies. It is completely different than the calculations used by financial institutions to create credit scores. Your insurance score does not necessarily go up and down with your credit score because information from your credit report is only part of the equation. The role your credit report plays is to determine how you handle your money. Insurance companies are looking for information such as:
The theory behind adding credit information to insurance score calculations is...the lower a customer's credit score, the more likely the customer is to make a claim. Remember, there are many factors considered in scoring calculations, so having less than stellar credit is not a clear indication that your insurance score will be low. Please note, when insurance companies pull credit reports to calculate insurance scores, credit scores do not change. Inquiries are processed as a "soft hit" and show as an inquiry only. 2. Can You Be Denied A Policy Due To A Low Insurance Score? Yes, it is legal in some state to deny coverage or non-renew a policy based on a low insurance score. Insurance rates are regulated by each state, but underwriting guidelines are not. If you are denied coverage due to a low insurance score, you may want to inquire again later. Some insurance companies move underwriting thresholds for eligibility up and down to control how much business they are writing. If you are not eligible with a particular company, check again, you might be next time…especially if your score improves. 3. Can You Ask To See Your Insurance Score? When an insurance company denies a policy or offers less than their best rate, it is called adverse action. When adverse action is the result of a low insurance score, most states require the insurance company to notify the customer by mail. They are also required to include a list of sources used to determine the score. Insurance companies do not have to share the actual insurance score with you; however, if you believe there is a reporting error, you can inquire and correct it. By contacting consumer agencies that supplied information to your insurance company, you can correct errors and ask the insurance company to pull your reports again. The agency supplying incorrect information should notify the insurance company of the update. A few of the major players are listed in the Helpful Links box. Honorable Recommendation: Steps to make a Motorcycle Accident Insurance ClaimCheap Car insurance in FloridaDocuments and What You Can Do To Improve Your Insurance ScoreIn this section, the following topics will be covered:
1. Documents Used To Determine Your Eligibility and Rates To determine eligibility and rates, insurance companies use the following:
Be sure credit bureaus and data suppliers have accurate information on your reports. 2. Tips to Help You Improve Your Insurance Score In addition to accurate reports:
As you can see, insurance scoring is quite intricate. The rules vary from company to company and state to state. You may want to do a little state specific research before going shopping. By visiting the NAIC (National Association Of Insurance Commissioners) map, you can access state specific insurance websites. Honorable Recommendation: The Right Way To Sell InsuranceFire Insurance TipsCheap Bike Insurance Without DepositNote: This article is not a substitute for legal or insurance agent counsel as it has been written for informational purposes only. Please refer to the professionals in your state for more information that is specific to your needs. Anyway, if this article may help your friend’s then feel free to share with social sharing button and let us know your feedback by comment bellow. |
Labels: Insurance
