If I freeze my credit, will it impact my insurance?

Between January 2010 and November 2011, more than 50 individuals had their credit card info stolen by waiters working at some of New York City’s most venerated steakhouses. We’re talking places like Smith & Wollensky, Capital Grille, and Wolfgang's Steakhouse, where a steak au poivre runs around $57. Using the stolen data, members of the Steak Ring™ (our name, not theirs) counterfeited credit and ID cards out of an Upper West Side apartment, which they then used to buy and resell Cartier jewels, Louis Vuitton handbags, and cases of vintage French wine. 

In the end, 28 people were indicted; at the time, Manhattan’s district attorney, Cyrus R. Vance Jr., noted that identity theft was “one of the fastest growing crimes.” Unfortunately, he’s been proven correct: in 2021, there were a record 1,862 data compromises in the US, representing a 68% increase over 2020 and a 23% increase over the previous all-time high. What’s a concerned diner to do? And what does all of this have to do with insurance?

Before we answer the second question, we’ll tackle the first: If you don’t want to find yourself on the wrong end of the tri-tip, one way to combat identity theft is to freeze your credit, meaning that new creditors (or thieves) can’t access your credit reports. This is a pretty effective move since, without your info, new accounts can’t be opened in your name. (In the US, there are three major credit agencies—Experian, TransUnion, and Equifax—so you’ll need to freeze your reports with each bureau.) 

If you’re concerned about identity theft, a freeze will prevent some — but not all — fraudulent activity. If someone already has your mother’s maiden name and social security number, they can probably open a new account in your name regardless of any freeze. That said, freezing your credit is still a good move if you’ve had your information compromised.

Protecting your identity sounds like a win-win, but bear in mind that freezing your account can keep you from getting new credit — which in turn adversely affects your insurance premiums. You might not think that credit reports and insurance would be linked, but a bad credit score can influence your insurance score, the number providers rely on to help determine your rates. (An insurance score is used to calculate the chances an individual will file a claim while under coverage. The higher the risk, the higher the rate.) When faced with a frozen account, most insurance companies can’t pinpoint your insurance score, and without that score, they will likely assume the worst and quote you a higher fee. 

That said, it is easy to temporarily unfreeze your accounts. Most can be lifted online, by phone, or by mail, and you get to choose how long you want your reports to be available. You’ll want to go down that route if you’re shopping for insurance or considering taking out a loan. Long story short, freezes can be beneficial, but you’ll definitely want to lift yours if you’re planning to take out a new insurance policy. 

If identity theft is a big concern (or you dine at a lot of steakhouses), you may want to consider other measures, like fraud alerts and credit monitoring, to help stay abreast of account activity. Once you’ve set that up, you can always create an account and add your policy to your Marble wallet, where you can keep your coverage organized while also earning rewards on your insurance.