IRS Insurance Score
Clients often ask what is my IRS Insurance Score? How do I keep my Insurance score high? Often clients believe this score is based on income, address, ethnic group, religion, gender, marital status or even nationality. However, these factors do NOT play any part in your Insurance Score.
Credit-based insurance scoring was started in the early 1990s. It was discovered that there was a high correlation between this score and predicting loss. Today, use of the credit-based insurance score is accepted practice among regulators and consumers.
Definition of Insurance Risk Score: a measure developed by insurers based on credit information obtained from the three major U.S. credit bureaus and used as an underwriting tool. Such information includes payment history, number of accounts open, and bankruptcy filings, but has nothing to do with a consumer's assets. Insurers base their use of this measure on the theory that people who manage their money well tend to take better care of their homes and to drive more responsibly.
Your insurance score is a number between 100-900, which aims to predict the losses of a future insurance policyholder or applicant for insurance. This is not to be confused with your credit score. Your credit score is also a number, typically between 300-850, that aims to predict the future delinquency on credit accounts of a credit prospect.
A credit score and insurance score may seem the same, but a credit score is used to show lenders how likely you are to repay your debt. An insurance score is used to show insurance providers how likely you are to have a claim. That is why you will often hear it referred to as a credit-based insurance score
A good way to improve your IRS Insurance Score, is to keep your credit score high. Although they are different scores, your credit score is a factor that contributes to your Insurance Score.
Your credit score will not be impacted. Insurance-related inquiries are not counted against your credit score. If you obtain your credit report from one of the major bureaus, you will be able to see the inquiry, however it will never lower your score or impact your ability to obtain credit.