Money and the Law: What is an Insurance Score and How Does it Affect Your Auto Insurance Premium? | The business

Sensata Technologies Reports First Quarter 2021 Financial Results

Although insurance companies are convinced good credit equates to lower risk, this remains controversial. For example, if you don’t always pay your MasterCard bill on time, is it more likely you will cause an accident? (Critics of the use of credit information in insurance underwriting would suggest your astrological sign has greater predictive value.) How an insurance score is used is left to the insurance company; your carrier, if you ask, might or might not tell you your insurance score. My company (USAA) was unable to tell me my score. The Colorado General Assembly has dealt with this controversy , most recently in 2003, and what has evolved are statutes saying insurance companies can indeed consider credit history when deciding who to insure and what premiums to charge.

Curiosity now piqued, I found lots of information on the internet about insurance scores. They seem to be a numeric score derived, in part, from information out of a credit file from a credit reporting agency but with additional information and analysis woven into the formula. I was told I was benefiting from the use of an insurance score and I would pay a higher premium if my insurance company didn’t use my insurance score in determining my premium. I was further told my insurance score had been provided by LexisNexis Risk Solutions, a company that processes data of all sorts for all sorts of customers having all sorts of needs. I was told LexisNexis considers “many factors” in determining an insurance score.

Insurance scores are supposed to help insurance companies manage risk by predicting who is likely to file claims during a policy period. As if anticipating my question, my information packet also presented me with another disclosure titled, “Insurance Scores.” This told me an insurance score “is based on various aspects of the primary policyholder’s credit history … and is different from a credit score.”

Jim Flynn is with the Colorado Springs firm of Flynn & Wright, LLC. Email moneylaw@jtflynn.com.

Also, dovetailing on a provision in the federal Fair Credit Reporting Act, under Colorado law, if the use of credit information results in “adverse action,” such as a nonrenewal or a premium increase, the insurance company must give you a notice that identifies the credit reporting agency that produced the information and tell you about rights you have under the federal act to challenge information in your credit file. However, under these laws, insurers must notify you if they use credit information in connection with an application for coverage or the rate you will pay. And, if you ask, they must tell you the “significant characteristics” of credit information that affect your insurance score.

The News Highlights

  • Money and the Law: What is an Insurance Score and How Does it Affect Your Auto Insurance Premium? | The business
  • Check the latest News news updates and information about business, finance and more.
Disclaimer: If you need to edit or update this news from compsmag then kindly contact us Learn more

For Latest News Follow us on Google News


Latest Headlines
  • Show all
  • Trending News
  • Popular By week
Financial Severity Responds to Attacks on Legitimate Tax Planning
Emhoff praises Biden’s infrastructure plan at preschool visit
The president also hopes to open access to early childhood education by creating universal preschool for 3- and 4-year-olds and building more child care ...
OECD urges rich nations to share vaccines to balance growth
OECD urges rich nations to share vaccines to balance growth
Among developed countries, the OECD said the U.S. economy is set to grow this year by 0.9 percentage points less than it anticipated in May, though at a ...
Congress to White House: Finn-ish the sale
Congress to White House: Finn-ish the sale
“We are writing today concerning Finland’s fighter jet competition and to request the White House support U.S. efforts to win this race,” reads the Sept. 13 ...
Three more deaths due to COVID-19
Three more deaths due to COVID-19
“It’s still much higher than we would want it to be, but it does show what we’re doing is working,” Berry said. “We’re certainly not out of this yet — I don’t ...
Apple Suggests AirPods Could Be Used to Estimate Respiratory Rate
Apple Suggests AirPods Could Be Used to Estimate Respiratory Rate
Respiratory rate (RR) is a clinical metric used to assess overall health and physical fitness. In a paper highlighted on the Apple Machine Learning Research ...
Kern Public Health: 446 new cases of COVID, 6 new deaths |  News
Kern Public Health: 446 new cases of COVID, 6 new deaths | News
Since then, there have been 41,894 cases among unvaccinated individuals, and 1,732 of those cases have led to hospitalizations. Since Jan. 21, 671 of 37,933 ...
US Development Finance Corporation invests $10 million in Nithio FI to increase clean energy finance in Africa
US Development Finance Corporation invests $10 million in Nithio FI to increase clean energy finance in Africa
Related Links SOURCE Nithio https://www.nithio.com/ About Nithio Nithio is an energy financing platform powered by a proprietary AI-enabled risk analytics ...
Hawaii couple buys defunct Big Island dairy assets
Hawaii couple buys defunct Big Island dairy assets
“Having recently experienced the food challenges that were exposed by COVID and Hawaii’s lack of sustainable agriculture, we believe that this processing ...
Apply for Atlanta Emergency Rental Assistance Money While You Can
Rome court rejects Venezuela’s extradition offer for ex-oil czar
On Monday, Rome’s Court of Appeals, which hears extradition requests, rejected Venezuela’s extradition bid, said Ramirez’s Rome-based lawyer, Roberto De ...
Tom Hanks, an Android, and a Dog Travel Through Time In The Finch Trailer
Tom Hanks, an Android, and a Dog Travel Through Time In The Finch Trailer
In any case, Hanks’ sci-fi movie count has just ticked up to a total of three. He leads. Let’s see if you can answer a quick trivia question. Over the ...
Show next
Compsmag - Latest News from tech, business and health
Logo