Insurance scores, as defined by the III, are essentially “ratings based fully or partially on a consumer’s credit information. Insurers use credit information with other factors to help underwrite and price policies.”

Some states also allow consumers to request to see insurance scores from their insurance providers.

While the merits and fairness of such a system are highly debated—for obvious reasons—the III notes that the objective of measuring a consumer’s insurance score is to lessen the possibility that a driver who is deemed to be low-risk might inadvertently subsidize rates for a driver who poses a higher risk.

This perspective does little to assuage concerns for average Americans, who have experienced a staggering 26% increase in rates from 2023 to 2024—a consequence of high inflation, coupled with a rise in claims due to extreme weather damage, and an increase in the cost of vehicles and parts.

Keeping Your Credit Score Up And Your Premium Down

The good news is the most savvy policyholders can use insurance scores to their advantage, accessing the most competitive rates the market has to offer.

For instance, one practical approach to ensuring the most affordable insurance rates is to annually explore alternative options, particularly if any changes in credit rating have occurred. Exploring options is also recommended if a major life change has occurred, including moving to a new city, getting married or divorced, starting a new job or having children reach driving age. All of these factors can heavily influence an individual’s insurance score.

By regularly shopping around for rates, individuals can adapt to evolving market changes and secure more favorable premiums.

Additionally, as we’ve seen, leveraging a “good” or higher credit score is at the core of ensuring competitive auto insurance rates regardless of the inevitable ebb and flow of the insurance market and any one of many external factors. Maintaining one’s personal credit rating can help keep costs down on an otherwise routine expense such as auto insurance.

Consumers would do well to remain watchful of their credit score and take steps to improve it if need be. The evergreen advice remains useful: paying bills on time, reducing debt and diligently monitoring their credit report for errors.

Ultimately, this is a reminder of the deeply symbiotic relationship between credit scores and financial security, underscoring the importance of maintaining a healthy credit profile. If you find yourself facing inaccuracies in your credit report or identity theft, you can work with a Fair Credit Reporting Act law firm to help get the compensation and fairness you deserve when your consumer rights are violated.