“I think the insurance company uses the SS # to run a credit check on prospective customers. The better your credit rating, the lower your rate will be.”
That seems odd, and not needed. You pay your premium, you’re covered. You don’t pay it, they cancel. They can charge you based on driving record, but not on income from what i can see. Summing it up, no wonder we have identify theft. Some low paid loser losing for insurance company customer service desk has all the SSN’s they could ever wish for.
Questions and Answers on Credit Scoring and How Insurers Use Credit Information
The following information will help you understand how insurance companies use your credit information and how this business practice affects the cost of your insurance.
Can an insurance company look at my credit information without my permission? -- Yes. Both the federal and state Fair Credit Reporting Acts (FCRA), say that insurance companies may look at credit information without your permission for underwriting practices. The federal law can be found at www.ftc.gov.
Why do insurance companies use credit information? -- Some insurance companies believe there is a correlation between financial responsibility and insurance losses. They believe that credit information is a good measure of financial responsibility. They believe that consumers who show less financial responsibility will file more claims, so they should pay more for their insurance.
How do I know if an insurance company is looking at my credit? -- Ask your insurance agent or company if they use credit information for underwriting and rating. If credit history is used for underwriting, ask how it affects your eligibility for coverage. If credit history is used for rating, ask how it affects your insurance premium. Finally, you should ask if they will check the credit history of other people insured on your policy, such as family members, and how they will affect your policy.