Why Credit History Matters
Many insurance companies use credit-based scores to assess, manage and underwrite risk, to determine the premium on your insurance policy, to determine eligibility and conditions for a premium payment plan, to investigate and settle claims, to analyze business results, and to detect and prevent fraud. This FAQ section helps to explain how your credit score is calculated and how it could affect your policy.
What is an insurance score?
Your score is compiled through a review of your credit history and any patterns that result. It may take into account your payment history, any outstanding debts, the length of your credit history, whether you've filed for bankruptcy, and any new applications for credit.
How does insurance scoring work?
Extensive research shows a correlation between credit history and insurance claim history – those with certain patterns in their credit history are more likely to file insurance claims.
An insurance score does not take into account income, race, gender, religion, marital status, national origin or geographic location. It only reviews your credit history.
Why do companies use insurance scores?
The more insurance companies know about their clients, the more they are able to accurately underwrite and set rates that are accurate and appropriate for each customer. This enables carriers to offer insurance coverage to a broader range of customers and helps them determine your price.
Although credit history helps predict the potential for future losses, it's only one factor used in underwriting and determining the cost of your policy. The individual home characteristics, such as the insured value of the structure, the age of the home, and whether your property has a burglar or fire alarm are other important factors. You do not have to give your consent, and you can withdraw your consent at any time – the price you pay for insurance will always reflect your individual home characteristics.
How does Travelers Canada use my insurance score?
Travelers Canada uses your insurance score together with a number of other factors to determine the appropriate pricing available to you. Generally speaking, customers who have higher insurance scores and no prior claims qualify for a better price.
For those customers with prior claims, a higher insurance score will help them qualify for a better rate than a similar customer with a significantly lower insurance score. Similarly, customers with no prior claims and low insurance scores may also qualify for a competitive rate.
Travelers Canada also uses your insurance score to determine your eligibility for premium payment plans, and to assess, manage and underwrite risks insured under your policy.
What if there is an isolated problem on my credit report?
In most cases, an isolated instance of a late payment will not have a significant impact on your insurance score if you have an established pattern of responsible credit use. Travelers Canada recognizes that sometimes people face difficult circumstances that can impact their credit information, such as medical issues, divorce, or job loss. If you have a concern regarding your credit report, please contact our Ombudsman at firstname.lastname@example.org or at 1.844.958.0541.
The information in my credit history is personal and sensitive. What protection do I have against misuse?
Numerous federal and provincial laws and regulations are in place to protect you.
Under provincial laws, if the information in your credit history results in an "adverse action," by a company, that company must notify you and inform you about how to obtain a free copy of your credit report. You will also be provided with a description of your right to dispute your credit history.
Under provincial insurance laws, with some exceptions, insurers can use insurance scores for personal property insurance throughout most of Canada. With some exceptions, insurers are prohibited from using credit scores in automobile insurance throughout Canada.
Will my insurance broker have access to my credit report?
No. Your broker will not be informed of your overall score and will not have access to the underlying information used to calculate that score.
How can I improve my insurance score?
One of best things you can do to improve your insurance score is to make sure you pay your bills on time. You can also review the amount of credit you have and whether you are consistently using the maximum amount of credit available to you on your credit card(s). Consider how to reduce your debt without creating additional credit activity. Also, review your credit report regularly. Additional recommendations on improving your credit score are available from the Industry Canada website at ic.gc.ca.
To ensure we’re using the most current information to rate your policy, Travelers Canada may periodically re-order your credit report.
Will Travelers Canada show up on my credit report?
Yes, your credit report will show that Travelers has made a request to receive your credit information. This information is visible only to you and is not shown to other third parties, such as banks. Our request for your credit information will have no impact on your credit score.
Who supplies an individual’s credit history to Travelers Canada?
Travelers Canada obtains an individual’s credit history from TransUnion Canada. You can contact TransUnion Canada at:
For English correspondence:
Attention: Consumer Relations
P.O. Box 338, LCD1
Hamilton, ON L8L 7W2
For French correspondence:
Centre de relations au consommateur
CP 1433 Succ. St-Martin
Laval, QC H7V 3P7
You can also contact TransUnion by using their contact information listed on transunion.ca.