What Factors Into Insurance Points

Each insurance company uses different factors to assign risk to a driver. Many insurance companies use an insurance points based system to calculate this risk. Companies that use the points system assign points for credit score, moving violations, at-fault accidents, parking tickets, driving under the influence and credit score. Insurance companies and credit scores were at one time not related, but many insurance companies now consider credit score when assigning points.

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When they use a point based system, insurance companies assign risk by points assigned to each infraction or negative mark instead of each incident itself. Each insurance company utilizes a different rating algorithm so comparing companies is challenging. To find the specifics regarding a companies point policy, request a copy of the company's filing with your state's department of insurance. Most insurance companies use complex algorithms and if searching for a company that weighs one factor lightly or not at all, an independent insurance broker may prove a simpler solution than investigating multiple companies' algorithms yourself.

Many insurance companies assign points to drivers with bad credit scores. The lower the score, the more points assigned. Insurance companies also add points for each individual traffic infraction or claim. The higher the points, the higher the premium will be upon renewal.

Insurance points do not directly relate to points assigned by your state. Although many insurance points correlate to incidents that may earn points on your license, it is the incident that increases the insurance points.