Q

What is an insurance score?

A

Your auto insurance score can determine what you pay for car insurance, and a low score could mean paying hundreds of dollars more per year for coverage.

Andrew Hurst

By 

Andrew Hurst

Andrew Hurst

Senior Editor & Licensed Auto Insurance Expert

Andrew Hurst is a senior editor and a licensed auto insurance expert at Policygenius. His work has also been featured in The New York Times, The Wall Street Journal, Forbes, USA Today, NPR, Mic, Insurance Business Magazine, ValuePenguin, and Property Casualty 360.

Updated January 26, 2022 | 4 min read

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An auto insurance score is a rating that your insurance company uses to estimate your risk of filing a claim. Auto insurance scores — also called credit-based insurance scores — are one of the many factors companies use to determine your car insurance rates.

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Credit reporting agencies calculate your auto insurance score much like a more familiar credit score, though auto insurance scores and credit scores are not the same. If you have had trouble paying off your debt, outstanding debts, or no credit history, you may have a lower auto insurance score — and pay more for auto coverage.

Key Takeaways

  • Auto insurance scores are ratings similar to credit reports that insurers use to predict how likely you are to make a future claim.

  • Insurance companies use auto insurance scores as one of many ways to determine what you pay for coverage.

  • Having a history of late payments, a high amount of debt, and no credit or weak credit could lead you to have a lower auto insurance score.

  • Drivers with poor auto insurance scores can pay over $1,600 more per year for coverage than someone with an excellent credit-based insurance rating.

What is an auto insurance score?

An auto insurance score is a rating that insurance companies use to evaluate your risk. Your insurer may calculate your insurance score itself, or use a third-party such as FICO, LexisNexis, or TransUnion for the data. Each insurer and rating agency calculates auto insurance scores differently, so you won't have the same score at every company.

Insurance companies use your auto insurance score to help determine your car insurance premiums. If you have a low auto insurance score, you will pay more for car insurance than someone with a good or excellent rating.

Like a traditional credit score, auto insurance scores (also called credit-based insurance scores) are based on information related to your debt, payment, and borrowing habits. While the models that car insurance providers use for determining auto insurance scores are usually kept secret, FICO considers the following factors:

  • Payment history (40% importance): Includes the payments you've made on any credit cards, your mortgage, and other installment fees. Also includes bankruptcies and your number of past-due items.

  • Current debt (30%): Weighs the amount you owe on all of your accounts, as well as certain types of debt you have. 

  • Length of credit history (15%): Considers the age of your oldest account, as well as the average age of all your accounts, and the age of your accounts according to the specific type of account.

  • New lines of credit (10%): Judges based on the number of recently opened accounts, according to type and the time since an account was opened.

  • Types of credit (5%): Focuses on how often you sign up for new credit cards, retail credit accounts, mortgages, and other loans.

Companies do not consider details like your race, ethnicity, religion, gender, and other personal characteristics when deciding your auto insurance score. Nor do they consider your location, employment history, or age — though these factors can still affect your premiums

Some companies do consider your past driving and claims history when calculating your auto insurance score. But even if your past accidents aren't a part of your auto insurance score, every insurance provider will use your past accidents and claims to set rates.  

What is a good auto insurance score?

Every company that creates auto insurance scores has credit tiers that they consider to be "good" — signaling that you're not much of a risk to insure. Auto scores can be as low as 200 and could go as high as 977 depending on which company creates your report. Good ratings are usually near the top.

Since insurers and rating agencies have different ways of calculating auto insurance scores, it's hard to say exactly what a good score is. For example, TransUnion considers a good insurance score to be at least 770 on a 997 point scale. Alternatively, the insurance company Progressive lists the following ranges for auto insurance scores:

Insurance scoreRange
Good776-997
Average626-775
Below average601-625
PoorUnder 500

How auto insurance scores impact rates

Your auto insurance score is just one factor that insurance companies consider when determining your car insurance rates. Along with your location, age, accident, history, and your coverage limits, insurance scores play a key part in your cost of coverage.

However, auto insurance scores can affect what you pay for car insurance even more than having an accident on your record. Drivers aged 30 to 45 pay an average of $1,652 a year for car insurance. After an accident, this premium increases by 55% to $2,555. 

Yet, the premium for a driver with a poor credit-based insurance score is 88% more expensive than average at $3,107 per year. At the same time, drivers with excellent insurance scores can see their rates discounted 14% per year compared to the average.

Insurance scoreAverage costVersus average
Excellent$1,420-14%
Very Good$1,569-5%
Good$1,7184%
Fair$2,08426%
Poor$3,10788%

Table displays annual rates for full-coverage car insurance

There are some states where insurance companies aren't allowed to use your auto insurance score (and other non-driving factors) to set rates. The following states completely prohibit insurers from using your insurance score to set rates:

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How to check your auto insurance score

Insurers and credit rating agencies don't allow most people to check their insurance scores for free, like you can with credit reports. In fact, most major rating agencies won't let you know your scores or how they were calculated without a reference from your insurance provider.

However, you may be able to get an idea of what your insurance score could be by checking your credit score. Both types of scores draw from your credit report. While the two scores are different, you could have a more favorable auto insurance score if you've maintained a good credit score.

How can you improve your auto insurance score?

Although you can't see your exact auto insurance score, you can still take steps to improve it. Because your insurance score and credit score come from many of the same sources, you could improve your auto insurance score through the same ways as your credit score.

Some of the ways that you could improve your credit-based insurance score include:

  • Making any mortgage, credit card, and other loan payments on time

  • Paying bills, taxes, and other fees on time

  • Keeping your balances low on your credit cards

  • Considering keeping your oldest accounts open to show a robust credit history

  • Avoiding applying for new credit cards or loans frequently (as long as you can make the payments)

Raising your insurance score takes time, but it can be done. If you are taking steps to improve your credit-based scores but still pay too much in car insurance, consider asking your insurance provider about auto insurance discounts. You could save money more quickly by opting for paperless billing or electronic payments or taking a defensive driving course.

Some companies also specialize in covering drivers with poor credit at more affordable rates than others. Because of this, you may be able find lower rates by comparing the cost of coverage from multiple insurers in your area.

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Frequently Asked Questions

Does getting a quote affect your credit score?

No, getting an insurance quote doesn't negatively affect your credit score. Insurers perform what's called a "soft pull" when they check your credit. Unlike a hard pull, soft pulls aren't visible to your lenders, so your credit score won't go down if you compare quotes, even from multiple companies.

Are there insurance scores for other types of coverage?

Yes, homeowners insurance companies also use insurance scores to determine your rates. When you apply for homeowners insurance, an insurer will calculate or consult an insurance score that's based on your credit report.

Do all insurance companies check your insurance score?

Most insurance companies, including all major companies, check your auto insurance score while calculating rates. However, if you have bad credit and believe you have a low insurance score, usage-based insurance companies could be a good fit for you. These companies, like Root or Metromile, set rates based on how you drive or how often you use your car. In turn, they de-emphasize your insurance score.