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Insurance Scoring

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Regular Contributor

Insurance Scoring

Hello all!


So I got my renewal notice from my insurance company and it said it pulled a score and was able to lower my rate, but also said a deregatory mark against me was having too many credit cards.

Does anyone happen to know the ideal number of cards that is best for insurance providers? I know its a different scoring model than FICO but I am considering cancelling a few cards so I was curious. My Freedom card for one is about to go bye bye as Chase still wont raise the limit and Citi gave me the 2% card. Blispay I am thinking of cancelling too.
















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Message 1 of 37
36 REPLIES 36
Highlighted
Super Contributor

Re: Insurance Scoring

What credit 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 credit 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 credit factors might include:

  • Collection accounts
  • Numerous past-due payments
  • High use of available credit
  • Numerous recent applications for credit

These factors vary by state to comply with the laws of each state. Its silly that people that have a lower credit score may file at a higher percentage rate over some one who has a higher credit score drives better than a lower score driver. I've seen more wrecks on higher end vehicles than hoopties. Go figure. Plus they look at your driving record and all kinds of other areas of your life. Its crazy.

Message 2 of 37
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Moderator

Re: Insurance Scoring

LN has a thing for store cards, not credit or cobranded cards.
If cards are useless to you, close them if that's what you feel like doing, but I would not close a perfectly useful store card with good rewards to appease LN and save $3.00 per month on auto insurance
Another thing is, LN considers all accounts under two years old to be new(ish).
Message 3 of 37
Highlighted
Regular Contributor

Re: Insurance Scoring

Wow seems like a pretty unfair scoring system then!

 

I wasnt really planning on closing anything just for an few dollars in insurance savings LOL. Chase Freedom has been on my hit list for a while. Its one of the newer cards so its age wont really come into play. It only has a 1000 limit which chase has chosen not to raise with any automatic increases at all in the 2.5 years I have had it despite never late and no abuse and almost always paid off each month. Its the lowest limit of all my cards too. Hell its lower than my overdraft LOC! Its interest rate is highest too at about 25.45%. I stopped using it about Feb this year because I am not being respected for my business by CHase so they dont deserve to make any money on me. I have heard some say I should keep it as now I am in with Chase, and some say if I use it more they may be more inclined but honestly, after nearly 3 years its their turn to show me love. So I figured if it would benefit insurance, that would be all the excuse I need to close it, but if not, well it sits in the sock drawer and I suppose I can set up automatic charges to my amazon gift balance from it so its used just not much. If the insurance companies care most about dept store cards well, Im SOL. Im not giving up the main ones I use and am actually considering an ebay card later. 
















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Message 4 of 37
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Valued Contributor

Re: Insurance Scoring

Insurance scores are just a scheme to make more money w/ little effort on their part to UW the policies.

 

The key to keeping your rates low is to shop around before every renewal.  I've been able to save at least $100/renewal whenever theree's a shift in the rates.  The last few years I was locking in an annual premium through AAA but, then they kept creeping and they got dumped for Geico every 6 months.

 

I tend to start with the aggregates like answerfinancial.com / insurance.com and then poke the smaller insurers to see the median prices.  AAA touts being $200-$450 cheaper than Geico and well, they aren't in 2019.  At one point a couiple of years ago State Farm actually came in the lowest and they're usually on the higher end of the spectrum.  Allstate for me is great for Home but, for auto they're outrageous.

 

As to Chase... it's probably bucketed and won't do much until you add another card from them into the mix and shuffle the limits around.  I had one that was stuck around 5K for years.... On a whim when I was replacing another couple of cards apped for the CFU and snagged a 25K limit then went back a few months later for a CLI and got 5K then went back 3 weeks later for CSP and another 25K CL out of that.  Sometimes you just have to take the HP and work around them to get where you want to be.  Combined 3 cards are north of 70K now.

500K+ TCL / 800+ FCOs
Message 5 of 37
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Super Contributor

Re: Insurance Scoring

Look what a quick search turned up:

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Auto-Insurance-Score/m-p/5570862/highlig...

https://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Auto-Insurance-Score/m-p/5570862/highlig...

https://ficoforums.myfico.com/t5/Credit-in-the-News/Credit-scores-and-auto-insurance/m-p/5557143/hig...

https://ficoforums.myfico.com/t5/General-Credit-Topics/Free-Transunion-Credit-Based-Insurance-Scores...
-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Oct 2020 New Account Scorecard.Nov 2020, No New Account Scorecard (reassignment conflated with aging. EX9 not updated yet. Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.


RIP:
(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 6 of 37
Highlighted
Senior Contributor

Re: Insurance Scoring


@Obscure-Expert wrote:

Insurance scores are just a scheme to make more money w/ little effort on their part to UW the policies.

 

The key to keeping your rates low is to shop around before every renewal.  I've been able to save at least $100/renewal whenever theree's a shift in the rates.  The last few years I was locking in an annual premium through AAA but, then they kept creeping and they got dumped for Geico every 6 months.

 

I tend to start with the aggregates like answerfinancial.com / insurance.com and then poke the smaller insurers to see the median prices.  AAA touts being $200-$450 cheaper than Geico and well, they aren't in 2019.  At one point a couiple of years ago State Farm actually came in the lowest and they're usually on the higher end of the spectrum.  Allstate for me is great for Home but, for auto they're outrageous.

 

As to Chase... it's probably bucketed and won't do much until you add another card from them into the mix and shuffle the limits around.  I had one that was stuck around 5K for years.... On a whim when I was replacing another couple of cards apped for the CFU and snagged a 25K limit then went back a few months later for a CLI and got 5K then went back 3 weeks later for CSP and another 25K CL out of that.  Sometimes you just have to take the HP and work around them to get where you want to be.  Combined 3 cards are north of 70K now.


I personally understand the idea of insurance scoring as I know a person who despite very high income was overextended.   They in a one year time frame had their multi million house catch fire in a "strange" cooking fire and 3 months later their cabin cruiser sank in  very unusual circumstance. I really do  not believe in the scoreing very much however and believe in common sence instead.

 

I am strong believer in shopping for auto and home insurance. Where I live 2 years ago was hit by extreme wildfires and storms. Many insurance firms pulled out or raised rates. By shopping on car insurance for 2 Jeeps full coverage $1mm liability  we pay under $140/month. For our home  with $500K  after the fires the first year we paid $2400 last year changed to $1400  and have new firm for next month lined up with $1200 premium.    

 

 

Message 7 of 37
Highlighted
Regular Contributor

Re: Insurance Scoring

Thank you for that idea of shopping around.. but wouldnt they all pull your CBR and be hard hits?

I do have a chase amazon card whose limit is 3K but I actually still use that on rare occasions. Maybe in a few years when I have no inquiries I might allow a HP on them if I still have them that is, but not right now. It really urks me that they want to HP and none of my other creditors seem to require that, just SP.

Thanx for the links to the other guy who sounds annoyed at me LOL.
















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Message 8 of 37
Highlighted
Senior Contributor

Re: Insurance Scoring


@TwilightSymphonie wrote:

Thank you for that idea of shopping around.. but wouldnt they all pull your CBR and be hard hits?

I do have a chase amazon card whose limit is 3K but I actually still use that on rare occasions. Maybe in a few years when I have no inquiries I might allow a HP on them if I still have them that is, but not right now. It really urks me that they want to HP and none of my other creditors seem to require that, just SP.

Thanx for the links to the other guy who sounds annoyed at me LOL.


@TwilightSymphonie  Insurance is a sp.

Message 9 of 37
Highlighted
Super Contributor

Re: Insurance Scoring

@TwilightSymphonie You’re welcome, you’re good. Not annoyed, just tired.

There’s some really good information in those links though and one of them actually has some old tables that lists the information you’re looking for, if I recall correctly. But you’re gonna have to read through the threads, I’m too tired to do it. 😉
-Our Community’s updated scoring wisdom: Link to Scoring Primer.
-For Negative Reason Codes see: CassieCard’s Score Factors thread.
-ccquest’s workbook to calculate metrics for you: Link to Workbook.

Oct 2020 New Account Scorecard.Nov 2020, No New Account Scorecard (reassignment conflated with aging. EX9 not updated yet. Oldest/avg varies. Estimates above.)
Real world mortgage maxes are: EQ5-818, TU4-839, EX2-844.


RIP:
(Everything said is JMHO and is not endorsed by FICO or MF. I have no affiliation with either, just a grateful member.)
Message 10 of 37
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