Insurance scores, like credit scores, can have a large impact on your financial stability and future savings.
This numerical scale is put in place to help insurance companies make educated decisions about how they insure their customers and can be helpful to keeping a customer's cost as low as possible.
A person's score will never keep them from being offered an insurance policy, but it can have an impact on their premium.
This scale, which was developed by the same institution that created the credit score, is a bit different than your credit score.
As opposed to credit scores, consumers want their insurance score to be as low as possible.
Also, insurance scores are determined on a comparative average basis that allows insurance providers to make an educated prediction of how likely a person is to file a claim.
Insurance providers use these scores in order to achieve efficiency and consistency in their policies.
Consistency also works in the favor of a consumer because it helps to guarantee that similar people are being offered similar policy prices, and are not victims of discrimination.
Also, insurance providers use scores to give better and more accurate premiums to their clients.
If you have a low insurance score, you most likely will not be a high risk for the insurance company.
Because of this you will pay lower premiums.
If you have a high score, this scale can still be to your benefit because it keeps you from paying an overly high premium as a way of insurance companies making up for other people's damages.