From Progressive:
Insurance Scores: What You Should Know 
What is an insurance score?
An insurance score is a score calculated from information on your credit report. Credit information is very predictive of future accidents or insurance claims, which is why we, and most insurers, use this information to help develop more accurate rates.What factors can affect an insurance score?
Favorable credit information results in lower premiums. Because both above-average and below-average factors are evaluated, you still have the opportunity to get a lower rate, even if there are some below-average items in your credit history.
How can I improve an unfavorable insurance score?
While there are some things that are out of your control—having a short credit history, for instance—you can generally improve your insurance score with us by making loan and mortgage payments on time, keeping accounts in good standing, and avoiding numerous credit applications in a short period of time.
How and Why Progressive Uses Insurance Scores How does Progressive use insurance scores?
Like other insurers, Progressive uses insurance scores and other underwriting tools and rating variables to place customers in groups, determine potential insurance claims risk for those groups, and calculate accurate rates based on the potential risk that each group represents. Progressive does not use information about credit history solely to refuse to insure a customer or to cancel a policy. In fact, our use of insurance scores has allowed us to offer lower rates to more customers.
Do all insurance companies use credit?
Most do. According to a 2001 survey by Conning & Co., a research firm based in Hartford, Conn., 92 percent of insurance companies used credit information when rating or underwriting new policies. As of early 2006, every top five auto insurance company was using credit to rate or underwrite new policies.
Why do Progressive and other insurance companies use insurance scores?
Credit has been proven to be a very powerful and independent predictor of future accidents or insurance claims. The use of credit history provides an additional predictive factor—one not offered by other factors such as driving record, vehicle type, age, etc. In fact, Progressive data shows that consumers with the worst insurance scores are twice as likely to have an accident or insurance claim as those with the best scores.
How does Progressive determine rates?
Progressive, like other insurance companies, groups customers based on similar characteristics, evaluates their claims experiences within these groups, and determines what to charge individuals with characteristics similar to members of the group. We charge a higher rate for customers more likely to have claims, and a lower rate for customers less likely to have claims.An insurance score is just one of many factors Progressive considers when determining rates. Depending on the state, we also consider your driving record, type of vehicle, where you live, your gender, your age and other factors.
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How the Use of Credit Information Affects You Will checking my credit during a quote affect my credit rating?
No. The Progressive inquiry will only be visible to you and the credit reporting agency. Other companies viewing your credit report will not see the inquiry.
Do Progressive representatives see my credit report?
No. Our software systems automatically request your credit report, so your Progressive representative does not see your credit report or know your insurance score.
How do I know that the credit information you are collecting is really mine?
We collect credit information based on multiple personal characteristics, including Social Security number, address, birth date and whether or not you have recently relocated. Collecting these pieces of information helps to ensure that the credit information we obtain is yours.
Does Progressive check credit history when my policy renews?
In states where it is allowed or required by law, we periodically review policies, including credit history.
How to Obtain Your Credit Report We recommend reviewing your credit information at least annually to ensure that your credit report is correct. Though credit reports generally are accurate, if you find a mistake, you should ask the reporting agency how to correct the information.
You can receive a free copy of your credit report once a year by visiting:You also can contact the following consumer reporting agencies directly for your credit report:When you receive a Progressive quote, we can tell you which credit reporting agency provided your information to us. If credit adversely affected your policy rate, we will send you information on how to obtain a free copy of your credit report from that agency.
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What the Credit Information Team Can Do For You The Credit Information Team is a specially trained group of representatives who can answer questions about our use of credit in auto insurance. The team can provide a personalized report that explains the following:
What is an insurance score?An insurance score is a score calculated from information on your credit report. Credit information is very predictive of future accidents or insurance claims, which is why we, and most insurers, use this information to help develop more accurate rates.
Each insurance company has its own method for evaluating this credit information. At Progressive, we develop our method by analyzing the following data from people we have insured:
- Accident and insurance claim history
- Credit report information
The results of this analysis tell us what credit information will help us predict how likely you are to have a future accident or insurance claim. We assign a value to each predictive credit factor and add up the values to calculate your insurance score. The lower your score is with us, the better.
Are insurance scores the same as credit scores?
No. A credit score is based on your ability to repay amounts you have borrowed. An insurance score predicts the likelihood of you becoming involved in a future accident or insurance claim—it is based on information gathered from policyholders with similar credit characteristics who have had previous claims with us.
When banks and other lenders determine credit scores, they may factor in your income, job history and other matters that might affect your ability to repay a loan. Banks also can deny you a loan based on your credit score. We do not consider income or job history, and we won't deny you a policy based on your insurance score.
What factors can affect an insurance score? Favorable credit information results in lower premiums. Because both above-average and below-average factors are evaluated, you still have the opportunity to get a lower rate, even if there are some below-average items in your credit history.
Favorable factors might include:
- Long-established credit history
- Numerous open accounts in good standing
- No late payments or past due accounts
- Low use of available credit
Unfavorable factors might include:
- Collection accounts
- Numerous past-due payments
- High use of available credit
- Numerous recent applications for credit
How can I improve an unfavorable insurance score? While there are some things that are out of your control—having a short credit history, for instance—you can generally improve your insurance score with us by making loan and mortgage payments on time, keeping accounts in good standing, and avoiding numerous credit applications in a short period of time.
Also, look at how much credit you have available. If you are using all or nearly all of your available credit, it could be regarded as an unfavorable factor.
How and Why Progressive Uses Insurance Scores
How does Progressive use insurance scores? Like other insurers, Progressive uses insurance scores and other underwriting tools and rating variables to place customers in groups, determine potential insurance claims risk for those groups, and calculate accurate rates based on the potential risk that each group represents. Progressive does not use information about credit history solely to refuse to insure a customer or to cancel a policy. In fact, our use of insurance scores has allowed us to offer lower rates to more customers.
Do all insurance companies use credit? Most do. According to a 2001 survey by Conning & Co., a research firm based in Hartford, Conn., 92 percent of insurance companies used credit information when rating or underwriting new policies. As of early 2006, every top five auto insurance company was using credit to rate or underwrite new policies.
Why do Progressive and other insurance companies use insurance scores? Credit has been proven to be a very powerful and independent predictor of future accidents or insurance claims. The use of credit history provides an additional predictive factor—one not offered by other factors such as driving record, vehicle type, age, etc. In fact, Progressive data shows that consumers with the worst insurance scores are twice as likely to have an accident or insurance claim as those with the best scores.
The following studies offer more information on the relationship between credit history and the likelihood of having a future accident or insurance claim:
- EPIC Actuaries, LLC: The Relationship of Credit-Based Insurance Scores to Private Passenger Automobile Loss Propensity. (PDF 308k)
- The University of Texas Study: A Statistical Analysis of the Relationship between Credit History and Insurance Losses. (PDF 162k)
How does Progressive determine rates? Progressive, like other insurance companies, groups customers based on similar characteristics, evaluates their claims experiences within these groups, and determines what to charge individuals with characteristics similar to members of the group. We charge a higher rate for customers more likely to have claims, and a lower rate for customers less likely to have claims.An insurance score is just one of many factors Progressive considers when determining rates. Depending on the state, we also consider your driving record, type of vehicle, where you live, your gender, your age and other factors.
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How the Use of Credit Information Affects You
Will checking my credit during a quote affect my credit rating? No. The Progressive inquiry will only be visible to you and the credit reporting agency. Other companies viewing your credit report will not see the inquiry.
Do Progressive representatives see my credit report? No. Our software systems automatically request your credit report, so your Progressive representative does not see your credit report or know your insurance score.
How do I know that the credit information you are collecting is really mine?We collect credit information based on multiple personal characteristics, including Social Security number, address, birth date and whether or not you have recently relocated. Collecting these pieces of information helps to ensure that the credit information we obtain is yours.
Does Progressive check credit history when my policy renews?In states where it is allowed or required by law, we periodically review policies, including credit history.
Is the use of credit information unfairly discriminatory?
No. Insurance credit reports do not contain any information on income, race, color, creed, physical handicap or disability.
How to Obtain Your Credit Report We recommend reviewing your credit information at least annually to ensure that your credit report is correct. Though credit reports generally are accurate, if you find a mistake, you should ask the reporting agency how to correct the information.
You can receive a free copy of your credit report once a year by visiting:You also can contact the following consumer reporting agencies directly for your credit report:When you receive a Progressive quote, we can tell you which credit reporting agency provided your information to us. If credit adversely affected your policy rate, we will send you information on how to obtain a free copy of your credit report from that agency.
Back to Top
What the Credit Information Team Can Do For You The Credit Information Team is a specially trained group of representatives who can answer questions about our use of credit in auto insurance. The team can provide a personalized report that explains the following:
- What information from your credit report was used to determine your rate
- How your insurance score compares to scores for other consumers who received Progressive Direct quotes
- Catastrophic illness or injury
- Divorce
- Death of an immediate family member
- Business loss
For all other questions, please call your agent or broker.
@MidnightVoice wrote:
@smallfry wrote:
@MidnightVoice wrote:
It didn't make enough difference to bother with. But I do get a free EX report, and I will use it to try and get EX to call my HELOC a mortgage loan!
Sorry to hear that. Must not be GEICO.
Progressive
IMHO Geico is a very picky company and Progressive is crazy expensive. We have American Family Insurance and pay only $97 bucks a month for two cars with the older one being a 2000.
I wouldn't go with any other car insurance right now. I am very happy with American Family. 