Standards for Use of Public Record Information, Credit Information, or Insurance Scores

Umialik takes pride in offering excellent products with personal service at competitive prices. Many factors are considered when determining premium, and many discounts are offered to ensure the best possible rates. Some of the factors used are public record information, credit information, and insurance scores. This section will provide some frequently asked questions and answers to help explain how and why Umialik uses this information.

Public record information means any written or other communication of any information about individuals by a consumer-reporting agency that:

1. Is not considered confidential.
2. Includes repossessions, bankruptcy, judgment, or lien.
3. Bares on a consumer’s financial capacity.
4. Is used or expected to be used, or collected in whole or in part, to serve as a factor in determining eligibility or rates for personal insurance.

Credit history means any written or other communication of any information about individuals by a consumer-reporting agency that:

1. Bares on a consumer’s creditworthiness, credit standing, or credit capacity.
2. Is used or expected to be used, or collected in whole or in part, to serve as a factor in determining eligibility or rates for personal insurance.

Insurance scores are confidential rankings based on credit history information. The score is developed from specific credit information that reflects credit management patterns such as collections, bankruptcies, outstanding debt, length of credit history, types of credit in use, and the number of new applications for credit. This is a measurement of how a person manages financial affairs and is not based on individual income.

Insurance scores do not include the following information: ethnicity, nationality, religion, age, gender, marital status, familial status, income, address, or handicap.

Insurance scores provide insurers with additional predictive information that is distinct from other rating variables. Insurance scores predict the average claim behavior of a group of people with essentially the same credit history. People with low insurance scores tend to file more claims.

Over the years, Umialik has been watching the use of insurance scores as a rating tool by many other insurance companies and has studied the powerful correlation between credit history and potential risk. Credit information significantly improves insurers’ ability to make accurate predictions about which consumers are likely to experience claims. This results in a more accurate cost of coverage based on a customer’s claim potential. That means an improved overall pricing system and a reward of lower premiums for lower risk customers.

Although both scores use credit information, insurance scores are developed using a unique mathematical formula that helps insurers predict the likelihood of insurance claims. 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. As insurance scores and credit scores are designed to measure different outcomes, different results may be shown.

New Applications – Personal information, including credit information, is gathered when applying for personal insurance. Umialik requires the policyholder’s signature on the application and the notice of information practices (both documents contain the authorization to collect and disclose personal or privileged information).

Renewals – Umialik will reorder an insurance score every three years, and any change in the discount will be applied upon renewal.

The policyholder may request a reordered insurance score no more than once every 12 months. Any change in the insurance score will be applied upon renewal.

Umialik uses public record information and credit information as two of several tools to underwrite an account. Public records and credit information are not used as the sole reason for declining an application. Other Underwriting reasons for declinations include, but are not limited to, poor claim experience, poor property condition / maintenance, ownership of animals, unacceptable liability exposures, unacceptable violations / loss history, excessive mileage driven to work / school, and previous poor payment history with Umialik.

Umialik will not decline coverage of personal insurance if there is an absence of a public record report, absence of credit history, or if public records are unable to be determined with complete and accurate information.

Umialik also will not use the following types of credit history to decline coverage, calculate an insurance score, or determine your rate: credit inquiries not initiated by the policyholder, inquiries identified on credit reports relating to insurance coverage, multiple lender inquiries identified as being from the home mortgage industry or from the automobile industry and made within 30 days of one another, and the total available line of credit (however, the total amount of outstanding debt in relation to the total available line of credit may be considered.)

No. Umialik understands the sensitive nature of credit information and keeps public record reports and insurance scores strictly confidential. Agencies, however, will be able to see the tier the score falls into.

An insurance score is a ‘snapshot’ of an individual’s credit bureau report information at a particular point in time. Scores and credit can be improved by paying bills on time, keeping balances low on credit cards, and applying for and opening new credit accounts only as needed. Scores change gradually according to how credit is handled. For example, past credit problems impact the score less as time passes. Credit history changes as new information is added to credit bureau files. Therefore, by taking the time to improve credit, policyholders can qualify for lower insurance premiums.

Checking credit reports periodically is beneficial. Credit reports contain information that identifies an individual’s debts, payment history, tax liens, bankruptcies, credit report inquiries, and accounts referred to collection agencies. Equifax, Experian, and Trans Union maintain credit reports. Should there be an error in a credit report, the credit bureau should be contacted. If a revised insurance score is reported to Umialik resulting from a discrepancy or error in credit history, the factor will be revised with the premium adjusted at inception of the affected policy or upon the renewal policy.

For more information about credit reports, contact:

Equifax (www.equifax.com)
For a copy of your report, you can call (800) 685-1111.
To dispute information in your report, write to:
P.O. Box 740256
Atlanta, GA 30374

Experian (www.experian.com)
For a copy of your report, you can call (888) 397-3742.
To dispute information in your report, write to:
P.O. Box 2002
Allen, TX 75013