What does my auto insurer know about me?

Because your auto insurance company identifies the rates that you receive from a variety of factors, it is important for them to know information.

One of the many things that your auto insurance has to know about you in order to sell you a policy is your credit score. You must have a good credit score in order to get good rates.

With your credit score, your auto insurer scores your finances. As a matter of fact, your credit score is known as the “insurance risk score”. Insurance companies believe that if you have a good credit score, pay your bills on time, you are responsible and will

Along with your age, sex, and credit report, your insurance company also knows your driving record.

Always keep in mind that your auto insurance company knows this information to identify your policy’s terms. These terms include your premium and the amount of coverage you are going to need.

The nation’s largest auto insurance company, State Farm, created a special model that will underwrite and determine the score for a policyholder who’s applying for an auto or a homeowners policy.

Different insurers have different ways of “scoring” their consumers. State Farm says, “It is significant that we are combining credit characteristics and prior claims history for these models and that we have developed the models using our own book of business. Our models are not designed to assess wealth, income, or creditworthiness, but focuses on the prediction of future insurance losses. The use of this model will lessen the extent to which those who represent higher potential risk are subsidized by those who represent lower potential risk.”

Government agencies credit-reporting companies will have the information that insurance companies collect and use for rating purposes.

You can check this information for yourself. You will be able to get a copy of your motor vehicle report from your state’s department of motor vehicles. You can also get your credit history from Experian, TransUnion or Equifax. The auto insurance company usually keeps a large amount of your information.

Auto insurance companies, like State Farm, might develop their own systems. If you want to find out exactly how your auto insurance company identifies your policy, you can always contact your auto insurer and find out for yourself.