Insurance Scoring

According to one survey, 92 of the top 100 insurers use some form of credit scoring.  Many of our companies (Progressive, GMAC, Hartford) have been using this underwriting tool to rate policies for quite a while.  In the fall of 2004, Erie Insurance began to use insurance scoring for new home and auto business.  They expanded this program beginning in April 2005 to adjust rates for new and renewal business.  This resulted in premium decreases for some and increases for others.

What is an insurance score?

An insurance score results from a credit-based statistical analysis of a consumer’s likelihood of filing an insurance claim within a given period of time in the future.

Is an insurance score the same as a credit score?

No.  A financial credit score is used to analyse a consumer’s ability to make installment payments.  While we look at some of the same information, insurance scores ignor things such as income and employment history.  There are 20 variables that Erie Insurance analyses for insurance scoring.  the top five factors are:

• Number of late paid accounts
• Number of derogatory public records (liens, judgements, bankruptcies… )
• Number of accounts on file
• Number of consumer inquiries in the last 24 months
• Bank installment accounts paid late

For more detailed information regarding insurance scoring and how it will affect you, please contact us.  You can also find information at www.erieinsurance.com or follow the link in the right hand column on this page.