Do i have to give social security number to insurance adjuster

OGC Op. No. 06-01-10

The Office of General Counsel issued the following opinion on January 9, 2006 , representing the position of the New York State Insurance Department.

RE: Use of Social Security Number to Obtain Insurance Quote

Question Presented

1. Are automobile insurance premiums based solely upon an individual's driving record?

2. May an insurer obtain an applicant's social security number in order to give an insurance quote?

3. What steps does an insurer need to take to protect the privacy of insureds and applicants?

Conclusion

1. No, there are a number of factors, including the applicant's driving record that determines an automobile insurance premium.

2. There is no law prohibiting insurers from requesting a social security number. An insurer has the right to ask for a social security number where the information is reasonably related to underwriting. One such purpose is to obtain a credit report of an insured.

3. The use of the social security number is subject to the requirements of the Department's Privacy Regulation, N.Y. Comp. R. & Regs. tit. 11 Part 420 (2001) (Reg. 169) and N.Y. Comp. R. & Regs. tit. 11 Part 421 (2002) (Reg. 173).

Facts

The inquirer states that the inquirer requested auto insurance quotes from the inquirer's local insurance agent who informed the inquirer that he needed the inquirer’s social security number to obtain the quotes. The inquirer would like to know why insurers need the social security numbers, and whether driving records are the only factor that determines an automobile insurance premium. Second, is it mandatory to give the social security number, and finally what steps must an insurer take to protect the privacy of the insureds and applicants.

Analysis

The factors that go into a premium for an applicant are not limited to the applicant's driving record. There are a number of factors that insurers may use to determine an automobile insurance premium, including an applicant's driving record, place of residence, use of the vehicle, and creditworthiness.

While the Social Security Act limits the circumstances under which a state may require an individual to provide his or her social security number, 42 U.S.C.A. § 405(c)(2)(C)(i)(West 2003), there is no such prohibition directed at private entities in this regard. Nor is there a New York law that prohibits insurers from requiring and utilizing the social security numbers of insureds for a legitimate underwriting purpose. One such legitimate purpose is to obtain a credit report of the insured. The Insurance Law allows insurers to use creditworthiness in underwriting risks of insureds subject to the limitations found in N.Y. Ins. Law. Article 28 (McKinney 2006 Supp.) & N.Y. Comp. R. & Regs. tit. 11 Part 221 (2005) (Reg. 182).

When an applicant furnishes his or her social security number to an insurer, the use of this information by the insurer is subject to the requirements of the Department's Privacy Regulation, N.Y. Comp. R. & Regs. tit. 11 Part 420 (2001) (Reg. 169) and N.Y. Comp. R. & Regs. tit. 11 Part 421 (2002) (Reg. 173). Some examples of this regulation include the obligation of insurers to send out a yearly statement that is clear and concise and explains the company's privacy practices and policies. There are limits placed on what the insurer can disclose to third parties. More specific information on the privacy regulations can be found at the Department's website at www.ins.state.ny.us where this information can be accessed in the "Privacy Regulations" section.

Finally while it is not mandatory for an applicant to provide his or her social security number to an insurer, the insurer may in turn not give an insurance quote and/or issue an insurance policy.

For further information one may contact Principal Attorney Paul A. Zuckerman at the New York City Office.

A Social Security number (SSN) is a nine-digit number that is assigned to all American citizens at birth by the Social Security Administration and it is completely unique to you. Because the number is so personal, it is understandable (and wise) to be protective of it.

Giving out your Social Security number to the wrong person could result in identity theft and lots of hassle. There are times when giving out your SSN will be necessary like when you’re applying for financing, getting a driver’s license (in most states), applying for utility services and even when you’re getting a quote for car insurance.

Let’s talk about when auto insurance companies will ask for your Social Security number and why.

Table of Contents

• Do insurance companies need your Social Security number?
• Why do car insurance companies need your Social Security number?
• Do I have to give my Social Security number for car insurance?
• Why would an insurance adjuster ask for my Social Security number?
• Is it safe to give an auto insurance company my Social Security number?
• What if I do not have a Social Security number?

Not all car insurance companies ask you for your Social Security number (SSN) as part of the quoting or application process, but most will, especially if they are offering credit-based insurance rates.

CarInsurance.com partners with car insurance companies that check credit-based insurance scores as a factor in your insurance rate. There are also carriers, in some states, that don’t use credit in their calculations. In California, Massachusetts and Hawaii, state law does not allow car insurance companies to use a credit score to determine rates.

Your Social Security number doesn’t have much to do with your driving record, but it does help the insurer pull the reports that help determine your rates. 

The online insurance quote process has two steps: getting a quote and purchasing a policy.

One reason a Social Security number is usually required is that it makes it easier to pull reports that verify the information you have given during the quoting process and help finalize the actual premium amount you will pay. Auto insurance companies can use your name and home address to pull your motor vehicle record, but there they have a much higher accuracy if they also use your Social Security number.

Another reason your Social Security number may be needed is so the insurance company can run a credit check. Credit history has been shown to be a good predictor of insurance claims. Many auto insurance companies use insurance scores based on your credit report, and if your credit is not verifiable, you may pay a higher car insurance rate. Those carriers that don’t require a Social Security number will use your address and name in order to calculate an insurance score.

While it is certainly your right not to give your Social Security number to a potential car insurance company, it is important to know that refusing to provide that information can backfire in the form of higher insurance rates. If the car insurance provider offers credit-based insurance rates and they are unable to look at your credit report due to lack of an SSN, they may either decline your quote or offer you a higher rate. The same is true if they are unable to pull your motor vehicle record.

Insurance rates are all about risk assessment and not having those vital pieces of information inhibits the insurance company from accurately assessing your risk. As a result, they’ll err on the side of caution and consider you higher-risk which will result in higher insurance rates. If you are looking for the best car insurance rates, giving the insurance company your Social Security number will be necessary.

It is not uncommon for an insurance adjuster to ask for a Social Security number as a security measure to ensure they are speaking with the right person. The Social Security number also may be used to check their database for prior claims.

It is important to know that an insurance company you’re working with is reputable. If you stick with major providers with nationally-known names, you can feel pretty comfortable to provide your social. For example, is Geico asking for a Social Security number? As long as you’ve confirmed that the person you are speaking with is truly a Geico representative, you should feel comfortable to give your Social Security number in the quoting or claims process.

If you have not requested an insurance quote and someone contacts you, whether via phone, email or text and requests your SSN, you should note provide your social without further investigation.

If you do not have a Social Security number, and one is required for you to get an insurance quote, call our service center at 1-855-430-7753 and our agents can assist you.

Penny has been working in the car insurance business for more than 10 years and has become an expert on procedures, rates, policies and claims. She has seen it all, and working with CarInsurance.com from its inception, she researches the routine and the bizarre with equal enthusiasm. She has three very active children and a husband with a zeal for quirky cars.