What is Insurance Scoring?

Submitted by Pike Mutual on Fri, 04/30/2021 - 8:00am
What is Insurance Scoring?

Insurance scoring, also known as credit-based insurance scoring, is a method that many insurers use to determine if they should take the risk of insuring someone/something, and how much they should charge for premiums. While your insurance score is not exactly the same as your credit score, it uses the same factors. These scores are used to determine how risky you are to either lend money to or to insure. This is why your credit score can often give you a good indication of what your insurance score will be.

What Affects Insurance Score?

Insurers have 2 databases that they refer to in determining an insurance score. They are the Automated Property Loss Underwriting System (A-PLUS) and the Comprehensive Loss Underwriting Exchange (CLUE). These databases contain the history of any property claims that have been made. The more claims an insurer sees in these databases, the more of a risk you are deemed to be to insure. Other factors that could possibly go into creating an insurance score include the zip code which you live in, the condition and age of the property to be insured, personal details such as your age, marital status, education and gender, and details from your credit report, such as payment history, outstanding debt and the length of your credit history.

 

Pike Mutual Does NOT Use Insurance Scoring

While insurance scoring is a common practice, Pike Mutual does NOT use insurance scoring to determine your insurability and rates. Our rates are based on the condition of the dwelling and outbuildings. Insurance, like credit, can be a complex process. We want you to be confident that you are receiving coverage you can trust at a fair rate. If you are interested in insuring through Pike Mutual, contact one of our independent agents in your area and they will guide you through the process.