Credit-Based Homeowners Insurance FAQs
Insurance score questions asked by homeowners
A credit-based insurance score, also known as an insurance score, is a snapshot of a consumer's insurance risk picture at a particular point in time based on information contained in a consumer's credit report. Since insurance scores have statistically proven to be a sound predictor of future loss, insurers use these scores, along with many other factors, to evaluate new and renewal insurance policies.
The consumer's credit information is entered into a computer model which analyzes the information and generates an insurance score. The scores are dynamic, changing as new information is added to a consumer's credit report. Insurers will typically ask for a current score when they receive a new application for insurance, or prepare to renew an existing policy, so they have the most recent information available. Please be advised Amica representatives do not have access to your individual credit report
It is important to note that there is a distinction between a financial credit score and an insurance score. The financial credit score uses information from a consumer's credit report to indicate the ability to repay amounts borrowed. The insurance score predicts the likelihood of future insurance losses.
Amica uses insurance scores as just one rating factor among many in determining the most accurate premium for our policyholders. Some examples of other rating factors include driving records, prior losses and vehicle and home characteristics.
In most states, you can simply contact us and we will provide you with your score. There are a few states in which the insurance scores are furnished to Amica by a third-party vendor. Unfortunately, in these states we are unable to disclose the scores since the information is proprietary.
An insurance score is generally based on the following: payment history, length of credit history, the amount of outstanding debt in relation to credit limits, types of credit in use and new applications for credit. These items may vary from state to state.
An insurance score does not take into account income, race, gender, marital status, religion, age, geographic location, nationality, ethnicity or handicap. It only considers your credit history.
Since insurance scores measure items related to insurance losses and credit scores measure creditworthiness, these scores may be very different. There may be items on a credit report relevant to a credit score but not relevant to an insurance score. Additionally, insurance companies consider a number of other factors when determining your automobile premium such as driving record, prior loss history, and vehicle type. For your homeowner premium, insurers may consider prior loss history, construction type, distance to fire stations and fire hydrants, and presence of protective devices such as smoke detectors and alarm systems. State laws and regulations also vary, so the factors insurers may use to calculate premium may differ by state.
There is no effect on your credit rating when Amica makes an inquiry into your credit history. However, the inquiry will be present on your credit report, should you choose to obtain one.
If you find errors on your credit report, you should report the errors to the credit reporting agency. By law, the credit reporting agency must investigate and respond to your request. Once these errors have been corrected, please notify Amica as you may qualify for a more favorable rate. Please be aware that some errors may have little or no effect on your insurance score and/or insurance premium.