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Use of Credit History Information and Insurance Scoring

Why does Travelers use credit histories or insurance scores?

Like many insurance companies, Travelers has found that the use of credit-based insurance scores, when used in combination with other traditional underwriting and rating criteria, greatly enhances our ability to meet our commitment to our agents and customers. Insurance scores are predictive of future loss. The research done by insurers, regulators, insurance scoring modelers, and independent actuaries establishes the valuable predictive nature of insurance scoring. The use of insurance scores provides us with a greater ability to assess the level of risk a customer presents, and this added confidence provides us with the opportunity to offer coverage to a broader range of customers. In fact, the use of insurance scores in underwriting helps most of our customers obtain a better price for their insurance.

How does Travelers use credit histories or insurance scores?

We will not deny, cancel, or non-renew your policy solely on the basis of an insurance score. Travelers uses your insurance score together with a number of other factors (prior claim history; age of driver) to determine the best pricing level available to you. Generally speaking, customers who have higher insurance scores and no prior claims or accidents, qualify for our best price. For those customers with prior claims or accidents, a higher insurance score will help them qualify for a better rate than a similar customer who has a significantly lower insurance score. In addition, we do not decline, cancel, non-renew, or increase premium on an existing policy due to adverse credit history information where it is demonstrated that such adverse information was the direct result of an extraordinary life circumstance, which includes catastrophic injury or illness; dissolution of marriage; death of an immediate family member; or layoff or job loss of an insured.

How often does Travelers review a consumer's credit information?

Upon request of a customer or agent, we will underwrite and re-rate a policy at the time of any annual renewal using updated credit history information.

What kinds of credit information are used by the insurer?
In determining your insurance score, the following information is used:

  • Payment history (do you generally pay your bills on time or are you more than 60 days late?)
  • Bankruptcy, foreclosures, and collection activity
  • Length of credit history
  • Amount of outstanding debt in relation to credit limits (Are you "maxed-out" or are you well within your limits?)
  • Types of credit in use (e.g., mortgages, installment loans)
  • New applications for credit you have requested

We do not consider or use the following credit history related factors in developing an insurance score:

  • Credit inquiries not initiated by the consumer
  • Insurance-related inquiries
  • Multiple-lender inquiries within a 30-day period (will be treated as a single inquiry)
  • Collection accounts identified with a medical industry code on the credit file
  • Disputed information that is identified on the credit file as under investigation by the credit-reporting agency.

Will a consumer's lack of credit history affect Travelers consideration of an application?

We do not refuse to provide insurance solely due to a lack of a credit history file or a lack of sufficient information in a file to generate an insurance score - termed in the industry as "no hit/no score" status. Actuarial data strongly demonstrates, however, that as a group, such consumers present a greater risk of loss than those with relatively high (favorable) insurance scores. To allow for pricing that is fair to all customers, our pricing program will account for this difference in risk in a manner consistent with our actuarial data and applicable law. Generally, this means that no hit/no score customers will not qualify for our lowest priced program, but it also means that no hit/no score customers will not automatically be placed in our highest priced program either.

Where can you go for questions?

Travelers believes that consumers should have access to a company representative who can assist with specific questions concerning a consumer's insurance score and how it impacted our underwriting or pricing decision. In addition, Travelers recognizes that sometimes people face difficult circumstances, such as medical collections, divorce, or job loss. We have created an Insurance Scoring Resource Center (ISRC) to assist our customers with issues like this. You can contact the ISRC at 1.800.550.7717.