What does my credit history have to do with how much I pay for my insurance?

*(This article is written with information provided by Travelers Insurance Company for their agents.)

What is a credit-based insurance score? Why do insurance companies use them?

A credit-based insurance score uses information from your credit report to help predict how often you are likely to file a claim. This score can also give insurance companies a fairly accurate idea as to how expensive those claims will be. Studies by federal and state regulators, universities, independent auditors and insurance companies have proven that credit characteristics are predictive of certain outcomes, such as insurance loss. The way your credit is handled indicates how responsible you are. Insurance companies want to reward responsible people for their good credit by lowering premiums. For several years, insurance companies have used these scores as a major component of their underwriting of insurance policies.

It is important to understand that your insurance score is not the same thing as your credit score. True, both are derived from data found in your credit report, but they are used to foresee very different situations. A credit score predicts how likely you are to repay a loan or other credit obligation. For example, when you are applying for a loan, the bank will consider your credit history as well as other factors, such as income in determining whether you are likely to repay your debt. Insurance companies do not ask you for your income nor do you have to provide your tax returns to prove your income. When you apply for insurance, the insurance company does order credit information from one or more of the three major U.S. credit bureaus. This information is entered into a computer program that generates an insurance score. These programs look at your payment history, collections, credit utilization and bankruptcies. They look to see if you have never been late paying your mortgage or other large purchases; if you haven’t been late then you will probably have a better insurance score than a person who pays late. Another example would be if you have "maxed out" credit cards, this will probably affect your score negatively. 

Credit-based insurance scores look for patterns of your financial management. Applying for one credit card is unlikely to have much effect on your score. But applying for several lines of credit in a short period probably will have an impact on your score. If you are shopping for a car or a house, you will probably fill out lots of applications within a short period of time to find the best deal. This shows that you are a responsible consumer. Under most of the current credit-based scoring programs, applying for several car loans over a limited amount of time will only count as one inquiry. Also, credit-based scores do not consider inquiries you initiate when you are shopping for insurance.

Insurance Institutes research has shown that consumers with better insurance scores generally file fewer claims and have lower dollar loss amounts when they do file a claim. That is not to say that all people with low insurance scores are higher risks or that it is the only factor considered. Who is driving on your auto policy is also a large factor. For instance, if you add a 17-year-old driver to your auto policy, your premiums will likely increase. This is due to as a group; younger drivers have more claims and losses than those with more experience. That does not mean that all 17-year-olds are bad drivers but research shows that drivers in that age group are more likely to have losses, so they pay more in premiums. It’s the same with insurance scores - research shows that people with certain patterns of credit behavior causing low credit scores are more likely to result in losses for the insurance company. Their insurance score will cause them to pay higher premiums, or with some companies they might not be able to qualify for the best rates. A Federal Trade Commission (FTC) study of insurance scores released in July 2007 found: "credit-based insurance scores are effective predictors of risk under automobile policies. These scores are predictive of the number of claims consumers file and the total cost of those claims." Additionally, the FTC study found that such scores may make the insurance process "quicker and cheaper" with "costs savings that may be passed on to consumers in the form of lower premiums."

What kinds of things affect my insurance score?
Insurance scores are based on credit report information like:

• payment history
• bankruptcies
• collections
• outstanding debt
• length of credit history
• new applications for credits
• types of credit in use

For example, regular, on-time credit card and mortgage payments affect a score positively, while late payments affect a score negatively.

Anytime someone looks at your credit report, the credit bureaus record this activity as an "inquiry." The number of inquiries on your record can also affect your insurance score. There are several types of inquiries, but under the insurance score programs used by most insurance companies, the only inquiries that affect your insurance score are those you initiate when seeking new credit for products, such as a new car loan or "easy financing" on new bedroom furniture. One way to improve your insurance score is to limit the number of self-initiated inquiries in your credit report. This can be done by only applying for credit when you really need it. For example, an unsolicited "pre-approved" credit card notice in the mail would not affect your score, because you did not initiate the offer. Taking advantage of the offer does count as you applying for new credit. An inquiry will then be posted in your credit history, which may have an effect on your insurance score.

There is no one formula to get a "perfect" score because your credit report is ever changing as time elapses and new payment history is added, accounts are closed or opened, etc. The key to a "good"score is using credit wisely - paying your bills on time and by using common sense in credit related activities.

Holiday Decorating Safety Tips

*(From A publication of the U.S. Consumer Product Safety Commission)

	Trees Many artificial trees are fire resistant. If you buy one, look for a statement specifying this protection. A fresh tree will stay green longer and be less of a fire hazard than a dry tree. To check for freshness, remember: A fresh tree is green. Fresh needles are hard to pull from branches. When bent between your fingers, fresh needles do not break. The trunk butt of a fresh tree is sticky with resin. When the trunk of a tree is bounced on the ground, a shower of falling needles shows that tree is too dry. Place tree away from fireplaces, radiators and other heat sources. Heated rooms dry trees out rapidly, creating fire hazards. Cut off about two inches of the trunk to expose fresh wood for better water absorption. Trim away branches as necessary to set tree trunk in the base of a sturdy, water-holding stand with wide spread feet. Keep the stand filled with water while the tree is indoors. Place the tree out of the way of traffic and do not block doorways. Use thin guide-wires to secure a large tree to walls or ceiling. These wires are almost invisible.
	Snow Artificial snow sprays can irritate lungs if inhaled. To avoid injury, read container labels; follow directions carefully. Don't let children play with the snow sprayed from can.
	Lights Whether you are using indoor or outside lights, be sure to use only lights that have been tested for safety. Identify these by the label from an independent testing laboratory. Check each set of lights, new or old, for broken or cracked sockets, frayed or bare wires, or loose connections. Discard damaged sets or repair them before using. Fasten outdoor lights securely to trees, house, walls or other firm support to protect from wind damage. Use no more than three standard-size sets of lights per single extension cord. Turn off all lights on trees and other decorations when you go to bed or leave the house. Lights could short and start a fire. Never use electric lights on a metallic tree. The tree can become charged with electricity from faulty lights, and any person touching a branch could be electrocuted! To avoid this danger, use colored spotlights above or beside a tree, never fastened onto it! Keep "bubbling" lights away from children. These lights with their bright colors and bubbling movement can tempt curious children to break candle-shaped glass, which can cut, and attempt to drink liquid, which contains a hazardous chemical.
	Candles Never use lighted candles on a tree or near other evergreens. Always use non-flammable holders. Keep candles away from other decorations and wrapping paper. Place candles where they cannot be knocked down or blown over.
	Trimmings Use only non-combustible or flame-resistant materials. Wear gloves while decorating with spun glass "angel hair" to avoid irritation to eyes and skin. Choose tinsel or artificial icicles or plastic or non-leaded metals. Leaded materials are hazardous if ingested by children. In homes with small children, take special care to: Avoid decorations that are sharp or breakable. Keep trimmings with small removable parts out of the reach of children. Pieces could be swallowed or inhaled. Avoid trimmings that resemble candy or food. A child could eat them!
	Fires Before lighting any fire, remove all greens, boughs, papers, and other decorations from fireplace area. Check to see that flue is open. Keep a screen before the fireplace all the time a fire is burning. Use care with "fire salts" which produce colored flames when thrown on wood fires. They contain heavy metals which can cause intense gastrointestinal irritation or vomiting if eaten. Keep away from children.
	Paper When making paper decorations, look for materials labeled non-combustible or flame-resistant. Never place trimming near open flames or electrical connections. Remove all wrapping papers from tree and fireplace areas immediately after presents are opened. Do not burn papers in the fireplace. A flash fire may result as wrappings ignite suddenly and burn intensely.
	General Rules for Holiday Safety Keep matches, lighters, and candles out of the reach of children. Avoid smoking near flammable decorations. Make an emergency plan to use if a fire breaks out anywhere in the home. See that each family member knows what to do. PRACTICE THE PLAN! Avoid wearing loose flowing clothes-particularly long, open sleeves-near open flames - such as those of a fireplace, stove, or candlelit table. Never burn candles near evergreens. Burning evergreens in the fireplace can also be hazardous. When dry, greens burn like tinder. Flames can flare out of control, and send sparks flying into a room, or up the chimney to ignite creosote deposits. Take time to plan for safety. Remember, there is no substitute for common sense. Look for and eliminate potential danger spots near candles, fireplaces, trees, and/or electrical connections.

Winter Driving Tips: Save Yourself From the Challenges of Driving in Adverse Weather

Severe weather can be both frightening and dangerous for automobile travel. Motorists need to know the safety rules and techniques for dealing with winter driving in New England. We would like to remind you to be cautious while driving in adverse weather and are offering helpful information on winter driving from AAA.

AAA recommends the following winter driving tips:

• Avoid driving while you're fatigued. Getting the proper amount of rest before taking on winter weather tasks reduces driving risks.
• Never warm up a vehicle in an enclosed area, such as a garage.
• Make certain your tires are properly inflated.
• Never mix radial tires with other tire types.
• Keep your gas tank at least half full to avoid gas line freeze-up.
• If possible, avoid using your parking brake in cold, rainy and snowy weather.
• Do not use cruise control when driving on any slippery surface (wet, ice, sand).
• Always look and steer where you want to go.
• Use your seat belt every time you get into your vehicle.

Tips for long-distance winter trips:

• Watch weather reports prior to a long-distance drive or before driving in isolated areas. Delay trips when especially bad weather is expected. If you must leave, let others know your route, destination and estimated time of arrival.
• Always make sure your vehicle is in peak operating condition by having it inspected by a AAA Approved Auto Repair facility.
• Keep at least half a tank of gasoline in your vehicle at all times.
• Pack a cellular telephone with your local AAA's telephone number, plus blankets, gloves, hats, food, water and any needed medication in your vehicle.
• If you become snow-bound, stay with your vehicle. It provides temporary shelter and makes it easier for rescuers to locate you. Don't try to walk in a severe storm. It's easy to lose sight of your vehicle in blowing snow and become lost.
• Don't over exert yourself if you try to push or dig your vehicle out of the snow.
• Tie a brightly colored cloth to the antenna or place a cloth at the top of a rolled up window to signal distress. At night, keep the dome light on if possible. It only uses a small amount of electricity and will make it easier for rescuers to find you.
• Make sure the exhaust pipe isn't clogged with snow, ice or mud. A blocked exhaust could cause deadly carbon monoxide gas to leak into the passenger compartment with the engine running.
• Use whatever is available to insulate your body from the cold. This could include floor mats, newspapers or paper maps.
• If possible run the engine and heater just long enough to remove the chill and to conserve gasoline.

Tips for driving in the snow:

• Accelerate and decelerate slowly. Applying the gas slowly to accelerate is the best method for regaining traction and avoiding skids. Don't try to get moving in a hurry. And take time to slow down for a stoplight. Remember: It takes longer to slow down on icy roads.
• Drive slowly. Everything takes longer on snow-covered roads. Accelerating, stopping, and turning - nothing happens as quickly as on dry pavement. Give yourself time to maneuver by driving slowly.
• The normal dry pavement following distance of three to four seconds should be increased to eight to ten seconds. This increased margin of safety will provide the longer distance needed if you have to stop.
• Know your brakes. Whether you have antilock brakes or not, the best way to stop is threshold breaking. Keep the heel of your foot on the floor and use the ball of your foot to apply firm, steady pressure on the brake pedal.
• Don't stop if you can avoid it. There''s a big difference in the amount of inertia it takes to start moving from a full stop versus how much it takes to get moving while still rolling. If you can slow down enough to keep rolling until a traffic light changes, do it.
• Don't power up hills. Applying extra gas on snow-covered roads just starts your wheels spinning. Try to get a little inertia going before you reach the hill and let that inertia carry you to the top. As you reach the crest of the hill, reduce your speed and proceed down hill as slowly as possible.
• Don't stop going up a hill. There''s nothing worse than trying to get moving up a hill on an icy road. Get some inertia going on a flat roadway before you take on the hill.
• Stay home. If you really don't have to go out, don't. Even if you can drive well in the snow, not everyone else can. Don't tempt fate: If you don't have somewhere you have to be, watch the snow from indoors.

Ask Marie!

Q. What should I do at the time of an auto accident or homeowner loss?

A. What to do at the scene of an auto accident.

1. Stop immediately but do not obstruct traffic.
2. Assist the injured. Have someone call the police. Repeat after 5 minutes.
3. Be sure to secure the following information from other drivers, witnesses, and/or injured persons before leaving the accident scene:
1. Names of drivers and passengers
2. Phone numbers
3. Driver's license numbers of all involved drivers
4. Auto insurance information and insurance agent’s information
5. Email addresses of those involved
6. Addresses of other drivers, witnesses, and/or injured persons.
4. Secure information regarding the vehicles involved:
1. Make and model of vehicle
2. License plate numbers
3. Where the cars have of the damage - if possible take pictures of the scene before cars are moved.
5. Make a rough drawing of the scene showing:
1. Position of the vehicles
2. Names of the intersections
3. Time of day and weather and road conditions
6. Don't hastily accept claim settlement at the scene of the accident.
1. Give time to be sure of injures
2. Get estimates for repair of vehicle
3. Talk to your insurance agent and /or adjuster from the insurance company
7. Remain calm, courteous, and consistent in your version of the accident.
8. Notify your insurance agent as soon as possible.

We know it is not always possible to secure all of this information at the time of the accident but the more information you are able to secure the easier your claim will proceed. At Brownell Insurance Center, we are there to help you during each step of the claim. If you have questions or problems, we are there to guide you.

What to do at the time of a homeowner loss.

In the event of a loss, the first thing you must do is protect the rest of your property from further loss. This can range from boarding up windows to covering your damaged roof with a tarp. Any protection against further loss is required by your policy, so you should do so to insure that your total loss will be paid for. Damage caused by your lack of attention to securing property may cause insurance companies to deny part of your claim. If possible, you should also take pictures of the damaged property before you do anything to secure the property.

The next step is to notify your insurance company of the loss either by telling your agent or calling your company directly. Be sure to tell them the complete details of the loss and what steps you have taken to secure the property. Almost all insurance companies have toll-free telephone numbers for their claims departments. Be aware that most conversations with the claims department of an insurance company will be recorded.

Once your claim has been presented to the insurance company, the next step is to have the claims adjuster come to the property and assess the loss. Some companies have claims adjusters on staff and others employ independent adjusters. This might take a couple of days depending on the nature of the claim. If your loss was due to a catastrophic loss (many in your neighborhood have a loss - i.e. Ice storm of December 2008 in New England) it might take longer due to the sheer volume that your insurance company needs to handle.

Please also let us know at Brownell Insurance Center, so we can help you navigate through your claim. Please note that we are not always notified by the insurance company of your claim. Providing us with the details of your loss will help us to guide you quickly to the right sources to getting your claim settled.

We always appreciate feedback on how your claim went. Complete information to the insurance adjuster can be invaluable in getting your claim settled quickly and receiving the amount you deserve to fix your property.