Karl Newman, President
Sandi Henke, Communications Director
NW Insurance Council
Phone: (206) 624-3330 / (800) 664-4942
Fax: (206) 624-1975
Follow at Twitter.com/nwinsuranceinfo
insurance scores prove both fair and accurate
- What does a person’s credit history have to do with
auto insurance? A whole lot more than most people think.
insurance scores are used by more than 90 percent of auto
insurance companies in the United States. Why? Because
they’ve proven to be a very accurate way to predict the
likelihood of a person experiencing a loss and filing
an insurance claim.
scores give insurance companies another tool to ensure
that customers get a fair rate, based on each policyholder’s
unique circumstances,” said Karl Newman, president of
the NW Insurance Council.
insurance scores can allow companies to give policyholders
lower preferred rates when other factors such as type
of vehicle or driving record would normally require higher
Here are some key facts about insurance
score is a numerical rating based on factors such
as timely payment of bills, public notices, bankruptcies,
tax liens and credit inquiries. Some insurance scoring
models also include prior claim history.
scores are only one of many rating factors used to
determine eligibility and rates. Some of the others
are age, driving record, vehicle, and mileage driven.
scores have proven to be a very accurate way to predict
future claims. Separate studies conducted for insurance
regulators and insurance companies have shown a very
strong statistical correlation between low credit scores
and frequent claims.
scores do not discriminate against lower income groups.
A low insurance score has nothing to do with income
and everything to do with how people manage their money.
In fact, some of the best insurance scores appear among
low and moderate-income groups.
- An insurance score will not be affected by inquiries
from most insurance companies.
- An insurance score does not consider personal characteristics
such as age, gender, income, net worth, home address
- Insurance scores do not include specific information
about outstanding loans.
The Federal Fair Credit Reporting
Act of 1970 (Amended in 2003) and Washington State’s
1993 Fair Credit Reporting Act allow insurance companies
to use credit information when evaluating insurance
credit wisely is the best financial strategy for maintaining
a healthy credit profile. FICO provides online
tips to help you improve your credit-based insurance
score. For additional information visit the Insurance
For more information about credit-based insurance scoring,
contact NW Insurance Council at (800) 664-4942 or visit
NW Insurance Council is a nonprofit, public-education organization funded
by member insurance companies serving Washington, Oregon