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Do auto insurance companies need your social security number?

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Things to remember...

  • Social Security numbers are unique to each person
  • Credit-based insurance requires the Social Security number to be provided
  • If the number is not provided, it can result in higher insurance premiums

Many people guard their Social Security number and give it out only when absolutely necessary.

It’s only natural to question whether car insurance companies actually need the information. Most insurance companies will request your Social Security number in order to provide you with more accurate car insurance quotes.

Get started comparing car insurance quotes by simply entering your zip code into our free comparison tool above.

What is the Social Security number used for?

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Each U.S. citizen and eligible U.S. resident is issued a unique nine-digit number. The government issues the numbers as a way of tracking your total earnings and the number of years you have worked.

It is also used by credit bureaus and other organizations to be able to track other information as it pertains only to you.

Your Social Security number is used to obtain detailed reports about your credit history and criminal background.

All of this information is used by the insurance companies in order to calculate your premium.

The insurance company will be able to read the reports to see what your credit score is as well as whether you have ever committed insurance fraud, vehicular manslaughter or other crimes that might impact insurance rates.

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How does a credit score weigh in on insurance premiums?

Many states are permitted to use your credit score when calculating the cost of car insurance. As to whether your state allows it, you will need to check with the insurance bureau for your state.

Some states have banned the use of credit scores, requiring insurance companies to rely on other information to calculate the cost of car insurance for individuals.

When credit-based insurance is permitted, the credit score isn’t used in its entirety. Instead, the insurance companies look at a few details:

  • No late payments
  • Longstanding credit history
  • Open accounts in good standing

A person who has a lower than average credit score might spend more money on their insurance premiums. The idea behind this is that they are more likely to miss payments as well as to file more claims with the insurance company.

The latter is vital as insurance companies spend more money when claims are filed.

If the insurance company feels as though you are going to file a claim for any reason, your premium will be higher to compensate for the expense they are likely to incur at one point or another.

If you have a low credit score and are being penalized when you buy a car insurance, it’s important to get a quote from multiple insurance companies.

Additionally, you will want to work at improving your credit score so that your rates may drop once it’s time to renew your policy.

What happens if you don’t to provide the number?

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It is your right not to provide your Social Security number. However, doing so is not in your best interest.

Without the detailed and accurate information that the insurance companies use to calculate your rates, they could assume the worst and penalize you with higher insurance premiums.

Many reports can still be obtained without the use of your Social Security number. Without the number, however, the reports might not be as accurate and they may take longer to obtain.

It is not a good idea to provide your Social Security number to just anyone. There have been plenty of reports of fraud because of openly sharing this number.

When you are shopping for car insurance, know the reputation of the website or the insurance company you are working with. By doing so, it will allow you to provide the number with confidence knowing that it is being protected.

Your Social Security number will most likely be used by car insurance companies. Even if your state doesn’t permit credit-based insurance, the number will be used to pull detailed reports about you.

Compare quotes from multiple insurance companies right here by entering your zip code below.

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