In a previous article, I discussed insurance credit scores used in auto and property insurance underwriting to predict risk and calculate your premium. There are two primary types of insurance scores – generic and custom.
Generic scores are based on data from many insurancepanies and can be used by many insurancepanies. These are sometimes referred to as “pooled data models.” These are sold to any insurancepany to use. Because they are not generic, they aren’t as effective as a custom score. Custom scores are developed by the insurancepany or for them by a third party using the insurancepany’s data and solely for their use. These scores are more predictive for the individualpany, since it is tailored to them. Many of the large insurancepanies develop their own custom scores.
Who builds the generic insurance scores and which are available to consumers? FICO and LexisNexis build the mostmonly used insurance scores.
Available to consumers
LexisNexis scores are built by LexisNexis and use the Equifax credit report. These are sold to both consumers and insurancepanies for a fee. There are two scores: Attract Home Insurance Score and Attract Auto Insurance Score.
TransUnion developed the TransUnion Insurance Risk Scores and uses the TransUnion credit report. The version sold to consumers is called TrueCredit Insurance Score; there are two available – Home Score and Auto Score and are available for a fee.
Not available to consumers
You may be familiar with FICO, key developer of consumer credit scores. They also build generic insurance credit scores available at Equifax, Experian, and TransUnion. They are two types: one for property and another for auto insurance. The version at Equifax is called InScore, at Experian is Experian/FICO Insurance Score and, at TransUnion is FICO Insurance Risk Score. FICO insurance scores are not available for consumers to purchase. In addition, custom scores used by many of the insurancepanies are not available for consumers to purchase.
For all these scores, high score means low risk and low score is high risk. Doesn’t this sound familiar? There were similar statistical techniques used to develop most credit scores. Insurance credit scores use the same credit report data as the consumer credit scores.
All the generic insurance scores except those developed by FICO are available to consumers. No laws require a free copy, but at least you can purchase some of them.
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Tags: Credit Scores, Insurance Credit, Insurance Credit Scores, Scores
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