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Most insurance carriers are using credit as part of the rating factor when determining what to charge a person for their home and auto insurance. This is true for Arizona home and auto insurance. In fact, it's more than just a part of the rating, it's a big part of the rating.
A person with a good "insurance credit" score will get a much better premium than a person with a poor "insurance credit" score. It's called an insurance credit score because it is very different than the financial credit scores used in lending. Insurance credit scores help insurance companies predict risk, or the likelihood of a certain client filing a future claim.
Although financial credit scores may be a factor in insurance credit scores other factors might include, "age of oldest account," "number of inquiries in 24 months," "ratio of total balance to total limits," "number of open retail credit cards," "number of revolving accounts with balances greater than 75% of limits," and so on. As a result of these factors being used, it is possible for someone with a high financial credit score and an excellent payment history to receive a poor insurance credit score.
Scoring models are usually unique to each insurance carrier. They all have their own way of "interpreting" the data. This is why it is important to call Insurance Professionals of Arizona if you want to find the best rate on your home and auto insurance. As independent brokers, we can shop around and find the company that is going to "interpret" your insurance credit score in the most favorable way and therefore give you the best rate.
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