Q&A: Why does my insurer need my Social Security number?

Q. Before my homeowners insurer would give me a quote on auto coverage, it wanted my birth date and Social Security number. Why is this necessary?

A. Your personal data allow the insurer to access your credit records, which companies use to place drivers in risk classifications. Those with good credit histories tend to pay less for car insurance.

Of course, you can refuse to give information to any business that requests it. Before you give out your Social Security number, ask why it's needed, how your number will be used and protected, and what the consequences will be if you refuse. And "don't give the information out to a company or agent you're not familiar with," cautions Jeanne Salvatore, vice president for public affairs at the Insurance Information Institute.