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Insurance Score: What is it and How Can I Improve It?

By August 28, 2021September 30th, 2021Home

When you apply for practically any type of insurance—homeowners, auto, health, or life—the insurance company will calculate your rates based on several factors that include your age, where you live, and the type of house or car you want to insure.

But there is one other factor that determines how low or high your monthly premiums will be, and many people might not be aware of it. It is called your insurance score, and you should know more about it.


What is an insurance score?

Like a credit score, an insurance score is a metric that the insurance industry uses to determine whether you will be a low-risk client or someone prone to accidents and will be filing lots of claims.

Each insurance company has its own method of determining insurance scores, making it difficult to know what number they have assigned to you. One thing is for sure: if you have a clean credit history and have filed few claims, your insurance score will be higher.


How is an insurance score calculated?

An insurance score is determined from information on your credit report and your insurance history, including claims. Your insurance score will depend, at least in part, on the same factors from which your credit score is derived:

  • Payment history
  • Amounts owed
  • Length of credit history
  • Credit mix
  • New credit inquiries


Your insurance score will likely include your accident and claims history. If you have been free of claims for several years and have a good credit score, you will probably receive a satisfactory insurance score and lower insurance premiums.


What is a good insurance score?

A low insurance score will result in higher premiums, while a good score will lower them. But what is a good insurance score?

Your insurance score is a three-digit number, just like your credit score. The insurance score range is from 200 to 999 and will depend on your insurer’s formula. Here is how that range might break down:

Score Range Rating
776 to 999 Good
626 to 775 Average
501 to 625 Below Average
Below 500 Poor

Insurers will consider your credit score as a factor in predicting how likely you will be to file a claim. A higher score indicates to them that you are less likely to cost them money. A lower score sends the opposite signal.


How can I improve my insurance score?

Here are some suggestions for raising your insurance score and saving money on insurance premiums. Keep in mind that since this is a credit-based insurance score, these tips will also help you toward a higher credit score.

  • Pay your bills on time
  • Keep your credit card balances low
  • Reduce your overall debt
  • Avoid too many loan and credit card applications
  • Limit the number of credit accounts and credit cards in your name
  • Take on new debt sparingly
  • Do not file small claims when you can comfortably pay instead


That last tip is not suggesting you should not use your insurance coverage when you need it. If you have substantial water damage from a burst pipe, for example, your insurance is there to help you. However, filing claims for amounts that barely exceed your deductible will lower your insurance score and may end up costing you more in the long term.

If you have a long history of missing payments or carry a large balance of credit card debt, it is probably time to get your finances back on the right track. Doing so will boost your insurance score and lower your insurance premiums. As a secondary benefit, your credit score will go up, and you will be able to borrow money at lower rates.


Lower your insurance rates by choosing the right company

After taking steps to improve your insurance score, talk to one of the White Cloud Insurance advisors. They can assist you with your insurance needs and ensure that you are getting the best coverage at a competitive price.

Just fill out our contact form, call us at 305-556-1488, or send us a message at