By Erin Thompson on February 2, 2021 in insurance basics
We told you that you have an insurance score, and we told you it's probably used to determine your rate. We figure we should also tell you what it is, why we care about it and what you can do with it. So here we go!
What is an insurance score?
An insurance score is a way of predicting how likely you are to have an accident or claim. It's not the same as your credit score and doesn't factor in things like the car you drive, the number of moving violations you've had or your income.
How do I get my insurance score?
With Say, there are two ways. When you get an auto quote, you can opt to see your insurance score for free. If you only want to see your insurance score, you can use our insurance score quote (also free). Once you're a Say driver, you can access your insurance score at anytime through your MySay dashboard. We get our insurance scores from LexisNexis, which is considered to be the leading analytical database of insurance scores.
What affects your insurance score?
By looking at the way you've handled finances and insurance in the past, we can compare those traits to policyholders who've had claims with us before and predict the likelihood that you'll have one.
How is an insurance score different from a credit score?
While credit scores and insurance scores both look into your financial history, there is a big difference in the way that information is analyzed.
A credit score is used by banks, credit card companies and other lenders to determine their confidence in your ability to repay a loan. It considers things like your debt-to-income ratio, payment history and job history.
An insurance score is more about how you interact with your financial accounts versus what's in them. It checks details like: Have you held accounts steady for a long period of time? Did you make all of your payments on time? How often did you reach your credit limit?
And while lenders can deny you a loan based on your credit score, Say Insurance won't deny you a policy based on your insurance score.
Why does Say care about insurance scores?
Consider an insurance score as our fast track way of getting to know you as a potential policyholder. It's part of a bigger package that helps us determine the best-fitting coverage. When you quote, we'll take a look at:
- Your insurance score
- A motor vehicle report to review your driving record
- A Comprehensive Loss Underwriting Exchange (CLUE) report to see any claims you've submitted
- Your risk profile based on specific characteristics
Does it matter after quote?
Short answer: Yes, but less. Once we get to know (and love) you as a customer, the score starts to lose its purpose. In fact, we intentionally lessen its impact on your rate. Whenever it's time for you to renew your Say policy, we will pull an updated insurance score from LexisNexis and add points in increments of 50 for each time you renew.
So for the first time, we'll add 50 points, the second time 100, the third 150 and so on (until your score is maxed out at 997). That way a devoted Say customer with an average insurance score can get a rate just as good as a Say newbie with an excellent score. And if your insurance score goes down because of a late credit payment or a new loan on a car, the added points from your loyalty to Say can help buffer the impact on your rate.
Can I improve my insurance score?
You can, but it'll take some time. It's all about showing a track record of good financial and insurance behavior. If you want to better your score, you can start with checking your credit score. We already told you credit scores and insurance scores are different, but they look at the same information.
You're allowed one free credit score report from major credit bureaus like Equifax, Experian or TransUnion. Look to see if all of the information is correct. You might find you were wrongly faulted for a late payment that you know you paid on time. You can dispute errors like that online and improve your score. Don't get discouraged if you see penalties you can't dispute—they will eventually fall off your record.
Reducing any credit balances and continuing a record of on-time payments can also help improve your insurance score.
If at any time you want to view your insurance score, you can purchase a LexisNexis® report. It will show current score, include explanations of each key factor and explain ways you can improve certain aspects of your score.