Managing your credit- borrowing money and paying your bills- is part of everyday life. The use of credit information by the financial services industry has long been a widespread practice, and credit has now become a key tool for insurers.
Home and auto insurers use credit information to produce an “insurance score,” which helps them to more accurately assess an applicant. Research has shown a strong correlation between credit history and the likelihood of loss in both auto and homeowners insurance. Insurance scores, then, provide an objective, accurate and consistent tool that many insurance carriers, including Erie Insurance, use in conjunction with other information to better anticipate claims.
But insurance scores are only one factor in the underwriting decision. Insurers also consider years of driving experience, previous accidents and violations, type of car and home construction type for example.
Is my premium based entirely on my insurance score?
No. Both auto and homeowners premiums are based on factors other than credit history. Your auto insurance premium is based on criteria such as your driving record, the type of car you drive, etc. Your homeowners premium considers factors such as the cost to replace the home in the event of a loss and the distance to the closest fire department.
Because Erie Insurance uses insurance scoring as one of our underwriting and pricing tools, we can offer lower premiums to customers who are deemed less likely to experience losses. Insurance scoring helps making insurance available to more consumers at a fair price. Like all insurers, Erie Insurance cannot deny an applicant insurance converage based soley on an insurance score.
Can my ERIE Agent tell me my insurance score?
No. In fact, your ERIE Agent doesn’t even know your score. Instead, your Agent only knows whether your score, in conjunction with other factors, makes you eligible for a particular rate or class within Erie Insurance.
Do you still have questions regarding Insurance Scoring?
Call our office at 765-935-5655 today to speak to an agent.