What Does Credit Have to do with my Insurance Rate?
Back in the Dark Ages of the 1990’s when I first started in this business,credit scoring for auto insurance policies was a new and controversial issues. A lot of people would refuse to give up their Social Security Number for a quote on insurance based on fears of hits against their credit and invasion of properties.
As I told them then and as I tell them now, the decision to use credit as a rating factor is way above my paygrade. It’s made by actuarials locked in a room with statistics and figures who tell the powers that be about a powerful correlation between credit rating and predicting claims.
Over the years credit rating is a common practice for all insurance companies that our office represents and most other major carriers out there(you might find some lower end non standard companies that won’t ask but they might not pay their claims either).
Basically in order to get a firm quote you will have to give your agent your Social Security number. As an agent we never see your credit. Your score just slots you into a specific program based on your score.Some companies use this as a more decisive factor then others in regards to your rate but you can’t get a firm quote without it.
I have seen many a customer get a great quote and go for the policy only to find that the company or agent never pulled credit and then they are greeted with an unpleasant surprise. So make sure wherever you go ask for a FIRM quote.Like everyone else I hate surprises.
Credit scoring is also starting to become a factor in homeowner rates too. Some companies will not take you if you’ve had a bankruptcy and a lot are asking for Social Security numbers to run reports.
Whether we agree with it or not,credit scoring is here to say.