<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=314834185700910&amp;ev=PageView&amp;noscript=1">
Financial Planning

Fortune 500 Employees: Does Your Credit Score Affect Your Insurance Rates?

 

As an Fortune 500 employee, you may find it fascinating to learn that credit-based insurance scores are used by approximately 95% of auto and home insurers to determine the cost of insurance for individuals.

In Massachusetts, Hawaii, and California, it is illegal for insurance companies to use credit-based insurance scores to determine premiums. Some states only permit it as a factor for property insurance, such as auto and homeowner's policies. Other states permit its use with all forms of insurance.

Several Factors

In general, insurance companies use credit-based insurance scores as a single factor in their underwriting procedure. We would also like to remind Fortune 500 customers that, dependent on the type of insurance, additional factors may be considered. In the case of auto insurance, additional factors may include your zip code, the age of the occupants, the make, model, and age of the vehicle, as well as the annual mileage driven.

The use of credit scores to determine insurance premiums is based on research indicating that individuals with lesser credit scores incurred greater auto insurance losses and were compensated more for their claims.

You can ask your insurance provider if a credit-based insurance score was used to underwrite and rate your policy, as well as the risk category into which you were assigned.

Employees of Fortune 500 who want to improve their credit-based insurance score should take the same steps they would take to improve their credit rating: make on-time debt payments, resolve past disputes, and maintain low credit card balances.

Achieving Greater Decision Accuracy, Better Risk Segmentation, and Greater Profitability with Predictive Analytics, Fair Isaac Corporation, 2012 (most current available statistics).

Added Fact:

Did you know that your credit-based insurance score can also impact your rates for homeowner's insurance? In addition to auto insurance, insurance companies consider credit scores when determining premiums for home insurance coverage. A higher credit score can potentially result in lower insurance rates for both your vehicle and your home. So, as a Fortune 500 employee, it's important to maintain good credit habits not only for your financial well-being but also to potentially enjoy more favorable insurance rates. By consistently managing your credit and staying on top of your payments, you can work towards improving your credit-based insurance score and potentially save on insurance costs for both your car and home.

Added Analogy:

In the world of insurance, think of your credit score as a rear-view mirror. Just like a rear-view mirror helps you assess the road behind you while driving, your credit score provides insurers with a glimpse into your financial past. It's like a reflection of your financial responsibility and trustworthiness. Just as a clear rear-view mirror enables you to navigate with confidence, a strong credit score can help you secure more favorable insurance rates. On the other hand, a murky or tarnished mirror may obscure your view, potentially resulting in higher premiums. So, as a Fortune 500 employee, make sure to regularly polish your credit score, ensuring it remains clear and reflects your responsible financial habits. By doing so, you can drive forward with the reassurance of better insurance rates, enabling you to protect your assets and enjoy peace of mind on your financial journey.

Securities offered through FSC Securities Corporation, member FINRA/SIPC and investment advisory services offered through The Retirement Group, LLC, a registered investment advisor not affiliated with FSC Securities Corporation. Although FSC is a signatory to the Broker Protocol, TRG is not. The removal of PII from FSC under the Broker Protocol is a violation of the Privacy Policy. Representatives are securities registered and are able to service clients in the following states: ALABAMA, ARIZONA, ARKANSAS, CALIFORNIA, COLORADO, FLORIDA, GEORGIA, ILLINOIS, INDIANA, KANSAS, MASSACHUSETTS, MICHIGAN, MISSISSIPPI, MISSOURI, NEVADA, NEW HAMPSHIRE, NEW JERSEY, NEW YORK, NORTH CAROLINA, OHIO, OKLAHOMA, OREGON, PENNSYLVANIA, SOUTH CAROLINA, TEXAS, TENNESSEE, WASHINGTON, WISCONSIN.

Webinar Ad for blog posts-2

Similar posts