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Insurance Credit Scoring

Home / Insurance Resources / Insurance 101 / Insurance Credit Scoring

How do insurers determine how much insurance premium a person will pay? Generally, insurers use actuarial studies and other data to determine how likely you are to have a claim.

One of many factors that insurers may consider in determining your premium is your “insurance score” which is based in part on how you manage your credit. Studies have shown that those who have better insurance scores will be less likely to have claims than those with worse scores.

Most people benefit from good insurance scores because they receive a discount on their premiums. If the use of credit scoring were eliminated from consideration in setting premiums, the majority of people would see their premiums rise.

Below you will find information resources for those who would like to learn more.

Information Resources:

  • Background on: Credit Scoring (III)
    This link provides background on insurance credit scoring from III and covers recent developments.
  • Overview of Major Studies (APCIA)
    This link provides a summary of major studies of insurance credit scoring.
  • Insurance Scoring Saves Consumers Money (APCIA)
    This document from APCIA describes the benefits to most consumers from insurance credit scoring.
  • Banning Credit Data in Auto Insurance Underwriting Would Hurt Consumers (NAMIC)
    This document from NAMIC provides an analysis of why underwriting restrictions on credit scoring harm consumers.

Insurance Resources

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News

  • IIK’s 2023 Agenda Items
  • HB 170 Passed to Streamline Settlements for Minors
  • HB 380 Passed to Modernize KY Insurance Laws
  • IIK Supports Hands-free Cell Phone Use Legislation
  • IIK’s 2022 Agenda Items

Issues

  • Insurance and the Pandemic
  • Personal Injury Protection (PIP) Auto Insurance Coverage
  • Local Government Insurance Premium Taxes (Municipal Premium Taxes)
  • The Use of Credit-Scoring in Setting Premiums
  • Municipal Emergency Response Fees (Accident Taxes)

IIK AMICUS BRIEF PROGRAM

IIK accepts applications from members and non-members to file an amicus brief in cases which could have an impact on insurance law in Kentucky. Learn more about how to apply here.

INSURANCE 101

Insurance 101 contains information on the basics of insurance as well as a brief look at some key issues that affect insurance consumers. Just click here to take a quick tour.

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Insurance Institute of Kentucky

Our Issues

  • Insurance and the Pandemic
  • Personal Injury Protection (PIP) Auto Insurance Coverage
  • Local Government Insurance Premium Taxes (Municipal Premium Taxes)
  • The Use of Credit-Scoring in Setting Premiums
  • Municipal Emergency Response Fees (Accident Taxes)

About IIK

The Insurance Institute of Kentucky is a non-profit corporation dedicated to educating, supporting and assisting the Kentucky insurance consumer, market and industry. read more...

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Insurance Institute of Kentucky
PO Box 54542
Lexington, KY 40555-4542
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