Definition of Insurance score:
An insurance score is a key component in determining the total premium that an individual pays for health, homeowners, auto, and life insurance policies. Insurance companies determine an individual’s score, in part, by using property claim databases like the Automated Property Loss Underwriting System (A-PLUS) and the Comprehensive Loss Underwriting Exchange (CLUE). .
An insurance score, also known as an insurance credit score, is a rating computed and used by insurance companies that represents the probability of an individual filing an insurance claim while under coverage. The score is based on the individual’s credit rating and will affect the premiums they pay for the coverage. Low scores reflect higher risk, so a high score will result in lower insurance premiums. Conversely, a low score will result in higher premiums.
The method insurance companies use to determine the risk of someone filing a claim. An individual credit score determines an insurance score because there is a link between poor credit and an insurance claim. A person with a higher insurance score has a lower premium than one with a low score.
How to use Insurance score in a sentence?
- Scores range between 200 and 997, with low scores reflecting higher risks.
- The insurance score is one of the primary determinants in how much monthly insurance premium the consumer will be assessed.
- What constitutes a good score varies for different types of insurance and rating companies.
- An insurance score is a credit rating used by insurance companies to assess a potential insured consumer's level of risk.
Meaning of Insurance score & Insurance score Definition