Frequently Asked Questions
Why Buy Insurance From An Independent Agent?
Independent insurance agents don't work for just one insurance company. We are contracted to place business with many different insurance companies. Therefore, we can shop for the most competitive prices and coverages for your policies. It saves you time and money to let us do the shopping for you. Just another way we can provide Choices for your insurance needs!
Does It Cost More Money To Have An Agent Service My Policies?
No! There are no additional fees for our services. In fact, most people can save money by letting an experienced independent agent service their policies. It not only saves you MONEY, but it also saves you TIME!
Is There An Advantage To Having All Of My Policies With The Same Agency?
Yes! Not only will it save you time by having one person to call for all of your insurance questions, it will save you money as well. Most insurance companies give substantial discounts for having more than one policy with the same company.
Why Do Insurance Companies Use Credit Information?
Insurance companies are in the business of assuming risk. We assume the risk, or chance that customers will suffer a loss, in return for an insurance premium. And, while we hope you never suffer personal loss, we realize that a number of our customers will. The reality is that insurance premiums of many people are collected to pay for the claims of a relatively few. Instead of charging everyone the same premium, we feel the responsible thing to do is to match the premium with the risk. In other words, we charge a lower price for those who have less claims, and a higher price for those who have more claims. The challenge, for insurance companies, is to try to predict in advance who will submit claims, so that those customers will pay their fair share in terms of insurance premiums. We feel it is important to develop individualized insurance premiums that reflect the likelihood of future claims. A number of tools are used to predict future claims activity. One of the most accurate tools is an Insurance Bureau Score, developed using information from an individual’s credit bureau report. Insurance Bureau Scores were developed to measure the likelihood of future claims activity. These scores reflect a measure of financial responsibility that carries over into other areas, including insurability. The better the Insurance Bureau Score, the less likely, statistically, an individual is to submit a claim, which should translate, we feel, to a lower premium. How do I obtain a copy of my report? In your insurance transaction with us, if you are adversely affected by information on a report, you may request a free copy of your report in three ways: 1.) By accessing ChoicePoint’s Web site 2.) By calling ChoicePoint at 1-800-456-6004 3.) By writing ChoicePoint at ChoicePoint Inc. P.O. Box 105108 Atlanta, GA 30348-5108 If you simply would like to obtain a copy of your report for your own information, you may contact the credit bureaus directly. They may charge you for the report. Equifax: 800-997-2493, or 800-685-1111 Experian: 800-397-3742 TransUnion: 800-888-4213
Is Insurance Scoring Fair?
Should those who submit fewer claims pay less for their insurance? We think so. And, we feel it’s important -- for our customers and us, to use as many tools as possible to help us identify, upfront, those individuals least likely to turn in claims, so that we can reward them with a premium that more fairly represents the likelihood that they will submit claims. We don’t use a crystal ball to determine who may submit future claims. Instead, we use tools that have shown, over time, the ability to predict future claims activity. Insurance scoring is such a tool. And, because studies have shown that insurance scoring is a very accurate predictor of future claims activity, we feel it may be unfair not to use it as one of the factors in underwriting and pricing insurance.
What Is Insurance Scoring And How Does It Differ From A Financial Score?
It is important to understand that insurance scores are different from financial credit scores. Both scores are developed from information on individual credit file records. Both types of scores utilize information on those records to predict outcomes. Financial or credit scores are the scores used by banks and other financial institutions to help determine both eligibility for and interest rates of loans for cars, houses, and credit cards. They analyze certain variables on individual credit files, and measure the likelihood of payment patterns, such as, if monthly payments will be made, and if they will be on time. Insurance Bureau Scores, on the other hand, help determine eligibility for, and amount of premium to be charged, by analyzing certain characteristics on a credit file, and determining the possibility of future insurance claims activity. As financial credit scores and insurance scores are designed to measure different outcomes, they may show different results. A file that reveals a strong financial credit score may not always show an equally strong insurance score.
What Criteria Are Included In The Development Of An Insurance Score?
Some of the individual items on a credit file that are used to calculate an insurance score include; amount of outstanding debt (how much is owed in total), length of credit history (how long accounts have been established), payment history (number of times payments were received late, and how much is outstanding), the types of credit used (revolving accounts, like credit cards, versus car or house loans), available credit (how many accounts and how much can be borrowed), and number of public record items (such as bankruptcies or liens). Many of these items, and more, may be reflected as either positives or negatives in the development of the score. Perhaps as important as those items included in the development of an insurance score, are those items not considered. Not included are; race, gender, income, marital status, age, address, or occupation. In addition, inquiries to the file by insurance companies, or unsolicited inquiries (promotional offers, etc.) are not included. Finally, any variables that are prohibited by law are not used.
Where Does The Information Come From?
Credit bureaus house the information from which the score is developed. The process begins by individual credit grantors (i.e., mortgage lenders or credit card companies) supplying account and payment information to a credit bureau. Once the file is opened, it can be accessed by entities with a permissible business purpose to do so. (Insurance underwriting is considered a permissible purpose under federal law.) The file information is run through the insurance scoring model, at ChoicePoint Inc., for calculation of the score, which is then returned to the insurance company.
Can I Obtain A Copy Of My Insurance Bureau Score?
If an agent has ordered an Insurance Bureau Score on behalf of State Auto, he/she should be able to provide you your credit level, authorization code, and report reference number. If an agent has not ordered a score on behalf of State Auto, we cannot provide your score, but you may contact ChoicePoint and receive its version of an Insurance Bureau Score, for a fee. Note: This score may differ from the one used by your insurance company, since different scoring models are available.
Is There Anything I Can Do To Improve My Score?
While an Insurance Bureau Score is a based on a snapshot of credit bureau report information, it generally reflects actions and behaviors over time. Likewise, changes to the score may also take time. But a few simple tips/practices can positively affect your score over time: Pay bills on time Keep balances low on unsecured revolving accounts, such as credit cards Apply for, and open new accounts only when necessary.
What About Privacy?
First, we do not receive actual personal credit report files, nor do we make them available to third parties, including our agents. We view only the score and have limited access to the reasons the score was affected. Nevertheless, measures are in place to protect the privacy of information. State Auto abides by state and federal laws pertaining to confidential information. An example of this is the Federal Fair Credit Reporting Act. This act, passed in 1970, and modified in 1997, is nationwide legislation that was enacted to help protect privacy, accuracy, and use of consumer information. Among other things, it requires that consumers be notified if information on a credit report has adversely impacted them. It also stipulates that consumers can find out what is on their consumer report files. In addition, it addresses the accuracy of the report -- items may be disputed with the original supplier of the information, and any errors must be corrected. Finally, access to a consumer’s file is limited only to those with a permissible purpose.
Are The Reports Accurate?
Decisions in many industries are based on the information that comes from credit bureau report files. Mortgage companies, car loan and leasing businesses, credit card issuers, and retail establishments all rely on the information in those files to extend credit. Therefore, credit bureaus strive for complete accuracy. And, at least one independent study indicated that the reports are very accurate, and perhaps may be more accurate than an individual’s driving record. Because so much rides on the accuracy of the reports, however, it has been suggested that all consumers obtain copies of their credit report files from each of the three bureaus periodically.
How Do I Obtain A Copy Of My Report?
In your insurance transaction with us, if you are adversely affected by information on a report, you may request a free copy of your report in three ways: 1.) By accessing ChoicePoint’s Web site 2.) By calling ChoicePoint at 1-800-456-6004 3.) By writing ChoicePoint at ChoicePoint Inc. P.O. Box 105108 Atlanta, GA 30348-5108 If you simply would like to obtain a copy of your report for your own information, you may contact the credit bureaus directly. They may charge you for the report. Equifax: 800-997-2493, or 800-685-1111 Experian: 800-397-3742 TransUnion: 800-888-4213