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Insurance Scoring

What Do I Need to Know?
Farm Bureau Financial Services uses a tool commonly referred to as insurance scoring to help determine the premium you pay for insurance.  Your insurance score is obtained from LexisNexis and is based on your credit information.  The use of these scores has proven to be a valuable predictor of future potential losses.  Insurance scores are not the same as credit scores: credit scores are a determination of your ability to pay back what you have borrowed, while insurance scores are a predictor of the likelihood you’ll file an insurance claim. 

Read on for answers to a few frequently asked questions and some additional resources.

What is an insurance score? 
An insurance score is an assessment of your insurance risk.  It is not the same as a credit score, which reflects your ability to pay back what you have borrowed.

How do insurance companies use insurance scores? 
Our vendor, LexisNexis, provides insurance scores for our use.  They consider many factors, such as outstanding credit balances, types of credit, credit history, and applications for credit within the last 12 months.  Research shows a correlation between certain credit behaviors and claims activity, which is why insurance companies use this process to determine the premium they charge for the insurance coverage they provide.

Does an insurance score inquiry affect my credit score? 
No – when credit information is requested on our behalf, the inquiry is considered a “soft” inquiry and will not have an impact on your credit score. 

Will I still be able to apply for insurance? 
Definitely!  An insurance score does not determine whether or not you’re eligible for insurance.  It is simply a tool we use to make sure you pay the lowest premium possible for the coverage you purchase.

What if special circumstances in my life have a negative effect on my credit? 
If you’ve had an extraordinary life circumstance – a life-altering event like a medical condition, the death of a family member, involuntary loss of work, divorce or involuntary interruption of legally-owed alimony or support payments, identity theft, active military service, or the destruction or other loss of your home that makes it uninhabitable – we follow a special process that ensures these extenuating circumstances are considered in our underwriting process.  Your agent will be happy to help you with this.

What’s the best way to monitor my credit history? 
Once a year you may request a free copy of your credit report from each of the major reporting agencies. Simply call 1-877-322-8228, visit www.annualcreditreport.com or complete an Annual Credit Report Request Form and mail it to Annual Credit Report Request Service, PO Box 105281, Atlanta, GA 30348-5281.  

For more information about insurance scoring, visit www.iii.org/issue-update/credit-scoring OR click below to visit the LexisNexis website:

LexisNexis

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