If you own a credit card, you have probably heard of a credit score. Did you know that there is also such a thing as an auto insurance score?
In this article, we’ll examine what an auto insurance score is and how to find and improve your personal score. Then, we’ll share our recommended auto insurance providers for those concerned with their personal auto insurance credit score.
While improving your auto insurance score can be a helpful way to reduce your insurance cost, another great way to reduce the amount you’re paying is by getting quotes from several different providers. Enter your zip code or call (844) 246-8209 to start comparing best car insurance companies in your area.
In this article:
- What Is An Auto Insurance Score?
- What Is A Good Auto Insurance Score?
- How Can I Improve My Auto Insurance Score?
- Our Recommended Car Insurance Providers
- FAQ About Auto Insurance Scores
What Is An Auto Insurance Score?
An auto insurance score is a point system that insurance companies use to predict the risk of insuring drivers. While a credit score predicts the likelihood of someone defaulting on their payments, an auto insurance score predicts the likelihood of a policyholder filing an auto insurance claim. Drivers with a higher auto insurance score will generally pay lower premiums, while drivers with a lower insurance score will pay higher premiums.
Auto insurance scores are determined by three companies: Fair Isaac Corporation (FICO), TransUnion (TU), and LexisNexis. Insurance companies use the scores when underwriting policies and determining the cost to charge each driver for insurance.
What Affects Your Auto Insurance Score?
Here are some of the many factors that companies use when determining an individual’s auto insurance score:
- Credit score: Your credit score has a major impact on your auto auto insurance score. People with better credit report tend to file fewer insurance claims, costing auto insurance companies less money. For that reason, drivers with good credit scores generally have better auto insurance scores than drivers with poor credit scores.
- Number of tickets: If you have a large number of tickets, it could lower your auto insurance score, as you will be seen as more risky for insurance companies.
- Accidents: Someone who gets into a lot of accidents is seen as risky, and their auto insurance score is lowered because of this.
- Age: Drivers under 25 years old typically have worse auto insurance scores, because car insurance for teens is seen as more risky.
- Claims history: An auto insurance score reflects your insurance claims history. If you’ve made many expensive claims in the past, your auto insurance score might be lowered to reflect those claims. If you haven’t made any claims, your auto insurance score will generally be higher.
- Type of vehicle: If you have an expensive or high-performance vehicle, that could hurt your score. Car insurance companies categorize drivers with these types of vehicles as high-risk.
What Is A Good Insurance Score?
First, it’s important to note that FICO, TU, and LexisNexis all have slightly different score ranges.
- FICO: 250-900
- TU: 300-850
- LexisNexis: 500-997
Scores that are 700 and up are generally considered good and can result in lower rates, according to Investopedia. Anything above 800 is considered little risk to an insurance company and may qualify a driver for discounts.
How Can I View My Auto Insurance Score?
Credit Karma offers a free credit-based auto insurance score directly from TU. You can also purchase your score directly from LexisNexis, TU, or FICO.
How Can I Improve My Auto Insurance Score?
There are many different ways you can improve your auto insurance score. Here are two top ways to do so, according to Progressive.
Improve Your Insurance Claims History
If you improve your claims history by submitting fewer claims, your auto insurance score will improve. After all, your score is partially based on how likely you are to submit a claim. You can improve your claims history by doing the following, which decrease the likelihood that you’ll get into an automobile accident:
- Avoid driving from midnight to 4 AM on weekends.
- Park in a garage.
- Drive the same route every day.
- Drive at or below the speed limit and brake smoothly.
Improve Your Credit Score
If you have a poor credit score, there is always time to improve it. Here are some general tips to improve your credit rating, but you should consult a credit expert for advice on your unique situation.
- Be cautious about opening new credit lines. If you open multiple credit lines in a short time period, it can hurt your credit history because you are judged as more risky.
- Improve your payment history. You can do this simply by paying your bills on time.
- Improve your credit utilization rate. This rate measures what percentage of your overall credit limit you are using. Car insurance companies view it as a good thing when your rate is low, because it is a sign of responsibility. A good utilization rate is generally less than 30 percent of your total credit.
- Improve your length of credit history. This criteria measures the time since you opened your first credit account. Auto insurance companies prefer customers with a longer credit history. As such, it is a good idea to not close out your oldest credit card, even if you do not use it, since it helps your length of credit history.
Our Recommended Car Insurance Providers
If you are looking to buy insurance and are concerned about a potentially low auto insurance score, we recommend Progressive, Geico, and State Farm. We found these three providers to be the best for high-risk drivers. In addition, these companies are among the best in the nation for any driver.
Progressive: 4.5 Stars
Progressive began as an insurance company for high-risk drivers, and it continues to offer high-risk policies for most drivers. Our review team named Progressive auto insurance our first choice for high-risk drivers because of its great discounts for this group.
According to Progressive, drivers save an average of $750 through the company’s discounts. 99 percent of Progressive’s auto customers earn at least one discount. It is important to note that some discounts are only available in certain states.
Here are a few examples of Progressive discounts that can lower the price of high-risk auto insurance:
- Teen discount: Teens have higher auto insurance rates than other drivers, and Progressive offers discounts to those 18 years old and younger.
- Student discount: Students who earn a B average or better earn a car insurance discount with Progressive. In addition, college students who are more than 100 miles from home are eligible for a discount.
- Sign online discount: Progressive drivers save an average of 8.5 percent for simply signing documents online.
Read more in our full review of Progressive insurance.
Geico: 4.5 Stars
Geico Casualty, the high-risk subsidiary of Geico, uses a points system to determine how much an individual will pay for an insurance policy. It factors in how recent a high-risk driver’s accident or traffic violation was, for instance. We think that its points system can benefit high-risk drivers who have been driving safely for at least a year.
In addition to a helpful points system, Geico offers roadside assistance, rental car reimbursement, and mechanical breakdown insurance. A large number of discount opportunities are available to help you save money on car insurance.
Read more in our full review of Geico insurance.
State Farm: 4.5 Stars
Like Progressive and Geico, State Farm offers outstanding insurance coverage at an affordable cost and has great customer service ratings. State Farm auto insurance is our first choice for students nationwide. In addition, State Farm offers the lowest car insurance rates to drivers with a DUI in over 20 states, according to Investopedia.
With State Farm’s Drive Safe & Save™ program, you can save money on the cost of high-risk auto insurance. During the program, a telemetric device or an app on your phone tracks the way you drive. If you drive safely, including easy accelerating and braking, you can receive sizable discounts even if your auto insurance score is less than ideal.
Read more in our full review of State Farm insurance.
Deciding Which Provider Is Right For You
Whenever you shop for insurance, we recommend getting auto insurance quotes from multiple insurers so you can compare coverage and rates. In addition to the insurance company you choose, factors such as your age, marital status, vehicle make and model, and driving history can affect your insurance premium, so what’s best for your neighbor might not be best for you.
Use the tool below or call (844) 246-8209 to start comparing personalized car insurance quotes:
In an effort to provide accurate and unbiased information to consumers, our expert review team collects data from dozens of auto insurance providers to formulate rankings of the best insurers. Companies receive a score in each of the following categories, as well as an overall weighted score out of 5.0 stars.
- Industry Standing: Insurers with strong financial ratings and customer-first business practices receive the highest scores in this category.
- Availability: We consider availability by state as well as exclusions for specific groups of drivers.
- Coverage: This rating is based on types of insurance available, maximum coverage limits, and add-on policies.
- Cost and Discounts: Our research team reviews sample quotes for a variety of drivers in every state. Companies with lower prices and many car insurance discount opportunities receive the best scores.
- Customer Service: We comb through customer reviews and consumer feedback studies from experts like J.D. Power.
- Technology: Auto insurers with mobile apps, advanced online services and telematics are more likely to meet consumer needs.
More articles on car insurance:
- What Is An Insurance Company Code?
- Can A Lapse In Coverage Affect Insurance Rates?
- Car Insurance Grace Period
- Do Speeding Warnings Affect Your Car Insurance Rates?
- Auto Insurance Binder
- How Does Car Insurance Work?
- Short-Term Car Insurance
- Broad Form Insurance
- One-Day Car Insurance
- Month-to-Month Car Insurance
- Stacked vs Unstacked Insurance