Why does Farmers use Risk Assessment Indicators?
Industry experts have proven that a strong correlation exists between credit history and insurance risk. Because credit history is generally accepted to be a fair and accurate way to predict probability of future loss, Farmers Risk Assessment Indicator uses credit data to determine discount availability for applicants and customers. Please keep in mind that this is only one of several factors used in determining your premium.
Several years ago, Fair, Isaac & Company, a company that specializes in predictive modeling, developed the concept of assessing a customer’s credit history and evaluating it to predict future insurance losses. At the time, many industry experts had proven that a correlation existed between credit history and insurance risk. Convinced that it was a good way to accurately and fairly segment the appropriate rate for the appropriate risk, Farmers started using Risk Assessment Indicators. Keep in mind, this is one of several factors that may be considered in determining your premium.
Industry experts have proven that a strong correlation exists between credit history and insurance risk. Because credit history is a fair and accurate way to predict probability of future loss, Farmers Risk Assessment Indicator uses credit data to determine discount availability for applicants and customers. Please keep in mind that this is only one of several factors used in determining your premium.
Related Questions
- Whats not included in a Risk Assessment Indicator? Risk Assessment Indicators do not use the following information: Ethnic group Marital Status Religion Nationality Age Familial Status Income Disability Gender Address Can I improve my indicator and, if so, how?
- Whats not included in a Risk Assessment Indicator?
- Why does Farmers use Risk Assessment Indicators?
