Recently, many insurance companies have started using a credit based insurance score as part of their underwriting and/or rating process. Studies have shown that these scores help companies predict insurance losses more accurately. By predicting potential losses, we can provide a more appropriate rate for each policyholder.
An insurance score is determined by reviewing a consumer's credit history. A carefully developed and tested computer model performs the analysis. Goodville Mutual is using a model developed by LexisNexis Risk Solutions, Inc.
There are many factors that are reviewed including:
Yes - insurance scores are different from your credit score. Both scores use computer models to analyze data from your credit history. However, the credit score is used by banks and financial institutions to determine eligibility for and interest rates for car loans, mortgages and credit cards.
Insurance scores analyze certain characteristics of your credit history as a predictor of losses. Your score will help us to determine the best price available for your policy.
Since these scores are designed to measure different outcomes, they may show different results. A file that reveals a strong financial credit score may not always show an equally strong insurance score and vice versa.