Category: Insurance Agents

When determining insurance premium amounts, an insurance agency uses various formulas that calculate risk, both theirs and their customers.

One such detail that they use to determine a customer’s risk and whether that customer will be a significant liability to them is looking at that person’s credit score.

Though insurance agents have been pulling credit scores when giving new insurance quotes for decades as part of the accepted quoting process, many people seeking insurance for their cars, homes, and other property don’t see the connection.

The relationship between the two is actually fairly significant.

Why Are Credit Score Looked At For Insurance Rating Purposes?

So, why do insurance agencies look at the credit scores of new, potential customers when giving an insurance quote?

Research on risk and which customers are likely to cost an insurer more money suggests that those with lower credit scores make more insurance claims.

Conversely, those with higher credit scores are found to make fewer insurance claims.

This risk assessment is essentially based on basic math and what the research shows.

This Initial Rating Can Be Adjusted

What those looking for insurance should know about this is that a lower credit score does not have to negatively affect their insurance rating forever.

While insurance agents use credit scores for making an initial quote, customers can always ask for a new quote in the future, even as a customer, if their credit rating has increased significantly since starting their policy.

Sometimes that can result in a lower risk assessment and an adjusted premium.

Also, re-running a credit inquiry for insurance purposes is considered a soft-inquiry and does not affect their credit score in any way, so there really is no harm in asking.

Lower Credit Rating Not Always Known

Fortunately, a decrease in credit score does not mean an insurance ageny will find out about it and immediately raise the premium.

In most cases, a lowering score does not affect anything as long as the customer has continued to pay their insurance premium payments on time and they have not made excessive claims.

If their claims habits suddenly change along with their credit scores, that could raise concerns that result in an increasing policy premium due to more claims being paid out.

In Summary

Ultimately, while some customers shopping for insurance might find their rates a bit higher if they have a low credit score, the good news is that there are things they can do about it.

With improving credit scores and avoiding making frequent claims, customers with the help of their insurance agents can keep their rates from rising and sometimes even get a slightly lower recalculated premium.

The lower the risk level they are to their insurance agency, the more affordable their insurance will be.

Insurance services have become very import today and people have the right to know the kind of insurance coverage to deal with when unforeseen events occurs.

There are various types of insurance plans that can be obtained to pay for your expenses in certain emergencies.

Travel Insurance

Travel Insurance is sold in certain time policies, usually for the period that you'll be traveling.

You should ensure that you have sufficient coverage when you are heading for a foreign country in case you get ill and need to be admitted to a hospital.

Laboratory fees and medical treatment costs can be expensive and travel insurance can pay for the unexpected costs.

Traveling without adequate insurance is a risk a lot of people don't want to take.

Auto Insurance

With increased vehicles on the highway, it is of the utmost importance that you have the proper auto insurance coverage on your vehicle.

Car insurance can pay for many unforeseen scenarios like accidents or car repairs.

It is crucial to have the correct liability coverage that will cover expenses, especially if the accident is your fault.

Life Insurance

In the event of your early death, you will want to ensure that your family will be able to carry on after you've passed away without any obligations.

Life insurance will pay off a mortgage, thereby reducing the debt load as well as provide your family with sufficient amount of money to use for their everyday needs.

Health Insurance

New government legislation has ensured that affordable health insurance is readily available to everyone and of all the types of insurance that exist today, this one is of the utmost importance.

It does not matter whether or not you have a pre-existing ailment, as insurance companies can't discriminate against you by making you pay higher premiums.

Credit Insurance

If you have debit cards, it is a great idea to have a credit insurance coverage.

This form of insurance will safeguard your credit card payments and make sure that they are kept up to date or in certain cases ensure that your debt is completely paid off in case you become severely ill and unable to work.

If you have lots of obligations, this is a good investment because missing a couple of payments on any credit card can completely ruin your credit history and leave you with a mounting debt that you just cannot pay off.

For many people, insurance has become something that is optional if not required.

The mere thought of finding insurance has become anxiety-ridden, but it is mainly because people aren't aware of how competitive the market has become, causing it to be more favorable to those looking for budget rates.

Finding out more about the insurance you need is the best way to start your search, with these tips offering a great guide forward.

How to Handle an Insurance Claim

When involved in an insurance claim, do not wait for the insurance company to make all the moves as acting on you own will ensure that you get what you are owed and in a timely manner.

Be sure to provide any evidence that will be required and be persistent in asking for information directly related to your claim.

When involved in an insurance claim, always be as professional as possible.

The people you are working with are people too, and you will see much more positive results if you are positive and professional.

Your insurance company only wants to know the facts, not the emotions. Proofread all written material sent to them.

Be Sure to Shop Around for Insurance Coverage and Rates

To save money on insurance, you should shop around and find out how different insurance companies will discount for multiple policies for the same household.

Most companies offer a standard 10% discount for placing all of your business with them but some firms will be able to make larger concessions.

You can learn so much more about insurance and find out how to really find the rates that you are interested in, which will give you a break in premiums.

It goes without saying that if you don't take the time to do the research needed, you could lose out on great information that you could use to get much lower insurance rates.

Keep these tips and others to mind and get a search for insurance started with the right strategy.