Fittingly, this is called an insurance score, but it takes into account more than just how promptly you pay your bills. It also incorporates data such as how many claims you've made on past policies, how frequently and how costly they've been to previous insurers.



This score has a dramatic impact on the cost of your auto and property insurance premiums. According to Robert Hartwig, president and founder of the Insurance Information Institute (www.iii.org), a nonprofit agency designed to help consumers with insurance questions, "These scores are basically credit information that an insurance company uses from your credit profile, but they then take that and relate it to actual information regarding your claims history or your legal history."

In other words, do you have a habit of suing people? Fair or not, those things factor into your insurance score. There's almost nothing you can do about it, other than keep your credit in tip-top shape and try to avoid making multiple claims.

"People with poorer credit tend to be associated with relatively higher losses to insurance companies," Hartwig says. "That group . . . can incur more claims or more costly claims, or both."

Hartwig says this is different than a credit score because of the manner in which information is used. "Insurance companies don't need all the information that's in a credit score. The insurer only takes information that correlates with what it needs to determine. They're looking to maximize the correlations between credit information and loss information. If [people] tend to be financially responsible, they tend to not be reckless behind a wheel, they tend to maintain their homes, things like that."

Perhaps the most interesting thing about insurance scores (and the most disconcerting) is that you can't change them—at least, not in the short-term—because your ranking factors in cumulative information over a period of years. Moreover, you can't find out what your score is because each company considers the method by which it ranked you to be proprietary.

"You can't find out because each company makes their own insurance score," explains Jeanne Salvatore, senior vice president of public affairs at www.iii.org. "Each insurance score also uses credit differently—some might just use it in applications and some give it greater weight than others. Underwriting (how a company determines who to insure and for what price) is very proprietary. That is how insurance companies compete—by being able to price the product better than the next guy. If they gave that away (how they rank individuals) they'd be giving away some part of their trade secrets."

So, what exactly can a person do with this new fact of insurance scores? Is your collision coverage too high because of it? Why do you need high risk car insurance?

"As a consumer, what you should be doing is shopping around, shopping for a good rate, because that ultimately is what you want to do anyway," Salvatore says.

And it's the best way to ensure you get the most affordable auto insurance possible.

That and drive safely!