An insurance score, also known as an insurance credit score, is a numerical rating used to assess the risk associated with an individual or entity. It is derived from an analysis of the person’s credit history and other relevant factors.

The insurance rating system is based on various aspects, including the individual’s credit history, payment patterns, outstanding debt, length of credit history, claims history and recent credit inquiries. Companies use this information to evaluate the likelihood of the person filing claims and their overall risk profile. A higher insurance score generally indicates a lower risk, which can result in more favorable premiums or coverage terms.

It is important to note that a score is different from a traditional credit score used by lenders and financial institutions. Insurers use specific algorithms and rating systems to calculate scores that are tailored to the industry and risk assessment.

The use of this tool is subject to legal and regulatory guidelines, and their impact on premiums and coverage may vary depending on the jurisdiction.