In early September the Equifax experienced data security breach affected nearly 150 million people. Exposed data included names, Social Security numbers, birth dates, addresses, and in some cases, driver’s license numbers, Equifax said in its announcement. The breach also compromised credit card numbers for 209,000 consumers, and dispute documents with personal identifying information for 182,000 consumers.
Precautions and preventative steps have been strongly encouraged by Equifax to protect your information, such as freezing your credit score. Freezing your account allows you to not only stop criminals but also prevents you from getting new credit. Unfortunately, this can negatively affect your insurance premiums.
When a new business applicant, with a freeze in place is quoted, most insurance companies are unable to obtain the insurance score. Your insurance score is essentially a rating that is computed and utilized by insurers. This number represents the likelihood of you filing an insurance claim during the time that you have coverage with that particular insurer.
If a business or consumer is to freeze their credit score, this will cause an insurance quote to be rated with a neutral score (insurance score code Z), which will likely result in a higher rate than if the quote had been rated with the applicant’s actual score.
How Can I Prevent Insurance Premium Increases?
If you have taken the precautions and made a credit freeze, please mention this to your insurance agent or providers. Typically they will ask you to temporarily lift the freeze so that quotes can be rated with the actual insurance score. This ensures you will be provided an accurate rate.
In order to lift a freeze, please travel to Experian security freeze portal. Consumer credit agencies are required to lift any freeze within three business days of receiving the request.
After the freeze is lifted, any quotes provided will be rated using your actual insurance score.
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