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Credit score / auto enhanced score / insureance score - "Home Insurance Score"???


b75
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The last post in this topic was posted 3977 days ago. 

 

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I understand that there are multiple models of FICO scores in use, as well as various industry "enhanced" scores. I also understand the difference between FICO/FAKO scores - and I'm beginning to feel that I have a grasp of what does what in relation to changing the various scores.

 

One particularly weak point in my mind is what (if any) specialized score might come into play for Home Insurance. It makes perfect sense to me that auto enhanced scores weigh past auto installment loans more heavily, and that traditional credit scores weigh your history of revolving lines more heavily - seems to make sense.

 

What factors are key in a home insurance credit score?

 

 

 

I only ask because any place I see a FAKO listed as a "Home Insurance Score" (CreditKarma, for example) it is grossly lower than my credit score, auto score or insurance score - by a couple hundred points, and invariably listed as "Very Poor". I've only ever had the one mortgage, and it's 11 years old and 100% positive. I don't figure they (the credit karma type websites) factor in non-credit criteria such as income or time at current job - but even if they did my income is pretty great and I've been at my job for twenty years, so that seems to be out. DTI and utilization are grossly below normal for me as well. Never filed a single claim, either - I pretty much only know the name of my homeowners insurance company from the mail they send me periodically...

 

 

Any input on what (if anything) these sites use to derive their Home Insurance scores? Is there a FICO equivalent out there? My gut feeling is that this is a particularly poorly calculated attempt at a FAKO, but maybe there's something out there that the home insurers take into account that I'm not aware of?

 

 

 

ETA: And, yes, I am aware I misspelled "insureance" in the post title. It's a particularly cruel to not allow edits in the most visible location for an OCD individual. :cry2:

Edited by b75
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Hi, insurance broker here,

Insurance score is not a fico or a fako and is calculated by a formula that is proprietary to the carrier. I have one carrier who has insurance scores that read like a fico 100-800. Another that assigns letter scores A is good F is high risk, and yet another that has a score that is two digits and no one can ever explain to me how to determine what they mean, sometimes a 30 is good and sometimes it's bad LOL - so its very obscure varies by each and every insurance company and is not new. Insurance scores have been around for roughly 90 years now. The home insurance score determines your likelihood to file claims based on your individual situation. It usually includes lexis nexis info, your prior/current carrier category (are you insured with a Preferred, Standard, Non-standard looking to upgrade/down grade or first time home buyer)

 

It also includes location info. So for example if people with your amount of collections or newly opened accounts or hard pulls (non-home related) or have a really great financial profile, have X percentage of filing claims in your area, and that will be factored in.

 

Insurance score is just one of several hundred thousand rating factors on a policy.

Other than improving your financial profile, having GOOD liability limits (think $300,000k liability or greater. This is NOT home coverage amount, its personal liability) ZERO non-weather claims, and high deductibles with a Standard or preferred carrier will give you better insurance rates.

Certain areas are going to just be high and thats based on the claims history or predictions for such claims in the area. So if in your neighborhood (think 2-3 mile radius) 75% of insureds filed a claim last year there is a good chance you will this year and that makes you higher risk by location alone. Having a perfect credit profile won't help in that case. It certainly won't hurt and your total cost will be lower but it's going to be a higher premium than say - if you lived in Wyoming or somewhere with a VERY low population and therefore low claims history pattern.

 

The law of large numbers applies more so to modern day home insurance than auto. It still is present in auto but it's VERY much a rating factor for home products. If you need me to explain this let me know.

 

I am not soliciting business, only posting my opinion in commentary.

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Thanks sincity! I appreciate you taking the time to share that information!

 

I understand the particular score I was seeing via CK is "bogus" - but I was more interested in the very info you shared regarding which factors would influence a "Home Insurance Score".

 

 

 

Much Appreciated!!! :clapping:

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You're welcome and yes CK's insurance score is totally bogus. Mine says it's a 989 but fako is barely above 500. Lot's of things in your financial world benefit from a good credit score and while insurance companies do not run hard pulls, it seems like a very similar concept to me. Good credit = good risk. I understand why people get upset about it or don't like it or don't want to but everything in insurance is about statistics and that's that. I actually have a really great insurance rate on my condo and I think it's just luck lol as I'm definitely not a good risk LOL

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