Why we ask for your Social Security Number
The use of a customer’s Social Security Number, in conjunction with accurate personal information, such as name and address, greatly increase the likelihood of a match with the national credit file. If an individual is a “no hit”, he may not be eligible for our best rate.
As our society changes over time, the underwriting of personal insurance also evolves to keep pace. One way is through the use of Insurance Scores. The concept of scoring has been used since the 1970s by many industries, most notably by financial institutions. Although an Insurance Score evaluates credit information, it does not measure credit worthiness.
What is an insurance Score? It is different from your credit score. Insurance companies use certain elements from your credit history; they never see your credit score and are not evaluating your overall credit worthiness. They calculate your insurance score using some or all of following types of information:
Your payment history; length of credit history; Your current balance on each account compared to your highest balance; number of credit card accounts; credit inquires; Bankruptcies, foreclosures and other collection activity.
By including insurance scores in the rating formula companies are better able to indentify the insurance risk each individual represents. Instead of assigning all of the customers to a few, broad rating groups they are able to make finer distinctions and offer more rating groups.