Why do insurance companies ask if you have a college degree, a certain occupation, or other seemingly very personal questions?
Insurance companies employ many tools to help them determine who might be the best policyholder for them. The tools used by underwriters are designed to predict losses and hopefully identify potential policyholders that will have few or no claims. Examples of tools developed over the years include educational background, occupation, territory or geography, age, male or female, and the list goes on. Because many of these underwriting concepts were developed before the information age, many rate filings with the department of insurance include discounts for various occupations, college degrees, driving history, and more.
When we ask these seemingly personal questions, we are trying to match all of the available discounts with the variety of insurance companies that we work with as a broker in order to give you the lowest premium possible. These discounts are ever-changing and as the information age involves, and data becomes more readily available, more emphasis will be placed on the information that can be underwritten behind the scenes and likely less understood than it is now. This may be better in some ways, but not so good in other ways. 
Data can be a double-edged sword, and the “science” of insurance underwriting is in a constant state of evolution with the goal being to insure policyholders that are unlikely or less likely to have claims compared to the average.
An example is with artificial intelligence as an underwriting tool, the insurance company obviously knows your home address but they can determine your work address as well. They may assume that you just drive to your job five days a week in order to calculate your driving/commuting exposure. While this is “easier” meaning you would be required to answer fewer questions when trying to get a quote, it can work against you in cases where you may work from home three days a week. The intelligence isn’t helping you get a lower premium in this example.
Our goal is to ask the right questions in order to give you the best bang for your buck when you are buying insurance. Because we are a broker that can place you with many different insurance companies, we may ask a lot more questions when first getting to know you. But please understand, we are trying to do the best job and provide you with the best available coverage to meet your needs.
Please call us today for quotes!
