Credit-Based Insurance Scoring

Insurance scoring is good for consumers, insurance agencies, insurers and the marketplace. It allows insurers to reward customers in -already existing risk pools with lower premiums and to write more consumers than they otherwise would. Insurance pricing and actuarial science is based upon the fundamental belief that premiums should be related to risk of loss. Using insurance scoring as part of cost-based pricing results in premiums that more accurately reflect risk of loss for each consumer, thereby reducing subsidies, which effectively are hidden taxes.

The relationship between credit history and insurance losses is not a matter of theory or conjecture, but of statistical reality and fact. State insurance regulators have recognized the strong correlation between credit-based insurance scores and future insured losses.

The greater the accuracy and reliability of the available data, the more healthy the marketplace for insurance, which mean lower costs, greater availability and more stability for the consumer.