The Insurance Score

Hey, I wanted to take a moment and help explain how insurance rates are calculated. How does an insurance carrier determine how much you will pay for insurance? Particularly, we are talking about home and auto insurance. So, insurance carriers are going to assign something called an insurance score to you. All carriers have a rating system for an insurance score, and they are going to assign this score to you. This score is basically an algorithm based on multiple factors. The factors are generally the same from company to company. but the difference lies mostly in how much weight is applied to each factor.

So what are these factors?

Insurance Premium

Insurance Premium

What is impacting your rate? These factors are made up of your age, how long you’ve been licensed, your driving history. If you’ve had multiple tickets, accidents, and other things like that, It’s obviously going to impact your rate. You’re claims history; roadside assistance claims can even have an impact. This also includes windshields, so if you’re using your auto insurance to replace your windshield just because you’ve got a little crack in it, that can impact your rate negatively when you go to shop with another carrier.

Your credit score plays an increasing role in how much you pay. So if you have a high credit score, youre probably going to pay less for your home and auto insurance. The length of time you’ve been with a carrier is important. If you’re changing carriers every year looking for a better rate, you’re likely going to harm your rates in the long run. An insurance carrier often does not earn a profit until year two or three with a client, so they want to make sure they keep you long enough so that they can earn some money. If you shop every year, you’re going to cost them money (and they know that), so you are going to be surcharged. But if you’ve been with your carrier for at least 5 years or more, it’s probably worth shopping because there is likely a better deal out there for you and your family.

If you don’t have an independent agent to shop for you and advocate on your behalf, give a call at 864-448-0392 – we’d be glad to help you! You can also begin a quote right from our website if you prefer. Also, you can check out more of our videos about personal insurance on our Youtube channel.


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