By 
Insurance scores and credit scores both use your credit report data, but they are not the same score and they are used for different purposes. Your credit score predicts the likelihood you will repay debt. Your insurance score predicts the likelihood you will file an insurance claim. Similar inputs, different outputs, different impacts on your financial life. Here is what you need to know.
What an Insurance Score Is
An insurance score (also called a credit-based insurance score) is a numerical rating derived from your credit report data that insurers use to help set premiums. The most widely used insurance scoring model is FICO’s Insurance Score, used by most property and casualty insurers.
Insurance scores use many of the same credit report inputs as credit scores: payment history, amounts owed, length of credit history, new credit, and credit mix. But the weighting is different because the question being answered is different. Insurers are predicting claim frequency, not loan default probability.
How Insurance Scores Differ From Credit Scores
| Credit Score (FICO) | Insurance Score | |
|---|---|---|
| Purpose | Predict loan repayment | Predict insurance claim likelihood |
| Used by | Lenders | Auto and homeowners insurers |
| Score range | 300-850 | Varies by model (200-997 for FICO Insurance Score) |
| Available to consumers | Yes — many free sources | Rarely — not widely available for free |
| What moves it most | Payment history (35%), utilization (30%) | Payment history, length of history, types of credit |
Does Insurance Checking Your Score Hurt Your Credit?
No. Insurance companies pull your credit report as a soft inquiry. Soft inquiries do not affect your credit score in any way. You can have your credit pulled by 10 different insurers comparing rates and your credit score is unaffected.
Which States Restrict Insurance Scoring
Several states prohibit or limit the use of credit scores in auto and homeowners insurance pricing:
- California: Prohibits use of credit for auto insurance
- Hawaii: Prohibits use of credit for auto insurance
- Massachusetts: Prohibits use of credit for auto insurance
- Michigan: Prohibits use of credit for auto insurance
- Maryland: Restricts use in homeowners insurance
In these states, your credit has no bearing on your auto insurance premium. In all other states, it is a factor — and improving your credit can directly reduce your insurance costs.
How Much Does Your Insurance Score Affect Your Premium?
Studies show consumers with poor credit-based insurance scores pay 53-91% more for auto insurance than consumers with excellent scores. The FTC found that lower insurance scores are associated with more and costlier claims — which insurers argue justifies the pricing differential.
In practical terms, improving your credit from fair (620-650) to good (720+) can reduce auto insurance premiums by $300-$1,000/year in states where credit scoring is permitted. This is a meaningful financial benefit of credit improvement beyond just loan rates.
What to Do With This Information
You cannot directly check your insurance score for free in most cases. But since it derives from the same underlying credit data as your credit score, improving your credit score improves your insurance score simultaneously. Focus on: paying bills on time, reducing credit card balances, and keeping old accounts open. The same actions that improve your FICO credit score improve your insurance score.
If you have poor credit and are paying high insurance premiums, improving your credit is one of the highest-return actions you can take — it reduces both your borrowing costs and your insurance costs simultaneously. See our credit score improvement guide.
Sources: FTC Credit-Based Insurance Scores report; Insurance Information Institute insurance score guidance; FICO Insurance Score methodology. This article is for informational purposes only.
