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Sub Headline: Insurance Companies Risk Assessment May be More About You Than Your Property
Synopsis: Anyone who has applied for a mortgage knows what it’s like to go through the gauntlet of financial investigation to secure a home loan. Insurance applications for your home and autos are not as micro-managed as that, but they have areas of scrutiny that may surprise you. Watch the interview with Beth Glowacz.
Content: Protecting the property value of your home, cars, and personal items is just part of the equation in pricing insurance. Other items such as past claims, credit score or your driving record can influence the price or even a declination. It’s understandable to most why you need to check out your driving record for traffic tickets and DUIs. The ACLU is not going to come to your defense because your driving record was reviewed. Traffic ticket history generally lasts five years, so eventually your tickets and accidents begin to fall off with good behavior. In many states a basic traffic infraction can be taken care of by taking an online course and paying the ticket, but that doesn’t erase it from your record. If you feel you need to expunge your record, you’ll need to take the time to go to court and elect the traffic course as your civic option and your record will be clean.
After all, if you have a lead foot or you’re constantly driving while intoxicated, your risk to the insurance company is significant.
But most people are surprised to learn that insurance companies are looking at your credit worthiness. It’s not a hard credit check, just a soft credit check. A soft credit check doesn’t show up on your credit report. It’s generally a letter rating system not the traditional score you might see in an Equifax report and for the vast majority of applicants it’s not a deal killer. But you could be paying more for a lower letter rating. A soft credit check may not necessarily use your Social Security number. Your address may suffice. So credit worthiness is not just connected to your mortgage, car or other loan interest rates you pay, but can also affect the premiums you pay for homeowners and car insurance. This is just another example of how correlated our financial information is in everyday life.
