How Insurance companies price your Car Insurance

Insurance can be an adversarial business relationship, unfortunately. In some circumstances, the more your insurer knows about you, the higher the rate they will charge you. This gives them every incentive to ferret out information pertinent to your insurance risks -- or what they believe affects your insurance risks, anyway.

A Consumerist article gives insight into the privacy implications and pricing strategy of auto insurance.

Note that insurance companies access the following databases to actuarially determine liklihood of an insurance claim: CLUE report, credit report, and driving history.

As with credit reports, a critical source of information is what you tell the insurance company:

Driving histories go back 36 months, except in New York (which is 40 months). Your history is composed from three reports; your MVR or Motor Vehicle Report, the state database of your ticketed driving history; your CLUE report, a collection of previous insurance companies reports stating the numbers of claims you've had, and YOU. If you say you got in an accident, were never sited for it and never claimed it on your insurance, but you still tell us, it'll be put on your record with an approximate date.

Credit score and insurance rates

It is illustrative how your credit report affects your insurance score, and thus your insurance rates. By 2001, 92% of insurers were considering credit scores when quoting insurance.

Remember that information you give to an insurance company may well end up on your credit report. Along with the usual distinguishing characteristics (name, date of birth, SSN or other national number), insurers will likely report your submitted information to the credit reporting bureay. This could happen even if you're just getting an insurance quote, and needs to be taken into account if you're keeping your street address confidential.

Complete truthfulness doesn't always pay when it comes to dealing with insurers who will collect every personal detail to accurately assess you with their actuarial tables.

Bermuda to track road vehicles with RFID

RFID Journal reports that the Caribbean nation of Bermuda plans to tag registered cars and trucks with RFID transponders to increase road registration compliance and revenues.

The ISO 18000-6B standardized, 915 MHz tags will be embedded in tamper-resistant windscreen stickers, and are made by 3M. The laser readers placed by the side of the road are made by Transcore.

Sabotaging the RFID tag is ineffective because the RFID interrogation is combined with an ANPR system:

If a car arrives at an intersection and no interrogation of an RFID tag can be performed, the system will take a picture of the car's license plate. Using optical character recognition software, the system will read the vehicle's plate numbers and input them into a database so a citation can be automatically issued. The same system will be employed to detect commercial vehicles operating in restricted areas during rush hour without permits.

Bermuda's Transport Control Department expects that all of the island nation's registered cars should be RFID tagged by June 2008. Motorcycles will be exempt from the RFID tagging requirement, though authorities may later decide to being them into the program.

The privacy implications of the mandated RFID transponders are profound. It is very feasible for groups unassociated with Bermuda's Transport Control Department to develop the ability to read the RFID tags and track specific automobiles by their electronic ID. In fact, an older version of this technology was used by a United States intelligence agency during the Cold War to track Soviet attaches whenever they crossed one of a handful of Washington, D.C. bridges and passed outside the 20-mile unrestricted transit limit.

Confessions of a Money Launderer

Money launderer Kenneth Rijock kept a low profile and
avoided creating a paper trail despite constant financial entanglements for his clients:

"I maintained absolutely no bank accounts in the US, operating on a strict cash payment basis to ensure that no records of any business transactions for criminal clients existed. This is much harder that it sounds, for though one might use third-party accounts that don't alert law enforcement investigators, it is more prudent to avoid it all together. I had no US bank accounts for five years, using an overseas tax haven account to obtain cashier's cheques drawn on a New York correspondent account very sparingly, and only for totally innocent personal transactions."

"Own nothing in your own name: rent your home and office, either lease an automobile or place it in the name of a third party. In short, make enquiries of your assets more difficult to discover, and information about your operation more difficult to link to you or your clients. If possible, reduce your profile even more by closing out legitimate business, whilst maintaining a fictitious facade that legitimate business is ongoing. return all telephone calls, but decline new business due to purported schedule overload."

Fake Credit Report Sites

If you're an American looking to get one of the free credit reports guaranteed by the Fair Credit Reporting Act (FCRA), the site you want is AnnualCreditReport.com. Their phone number is 877-322-8228.

Ignore all other sites or offers unless you're looking for high-pressure inducements for pricey add-on services, or even flat-out fraud. Do you really want to be giving out your vital information, like SSN and DOB, to a potential scammer or some random unscrupulous type who would portray themselves as an official source for data as private as a credit report?

For more information about the reputability of credit report websites, read the FTC report on fake credit report sites.

Keep those grandfathered bank accounts

Remember the proposed "Know Your Customer" (KYC) rules, where the U.S. government was going to force banks and related financial institutions to develop a profile on each of the insitution's customers?

But Know Your Customer was defeated, right? Not so fast.

Know Your Customer rules have been quietly resurrected as two separate programs, with other benign-sounding names.

Meet Customer Identification Program (CIP) and Enhanced Due Diligence (EDD).

Customer Identification Program, or CIP, requires that financial institutions (including casinos, pawnbrokers, insurers and money transmitters) positively identify the individual or organization with which they have a formal business relationship. The actual CIP procedure will vary by institution, but will be documented.

CIP requires the following information on each customer: legal name, date of birth (DOB), street address, and taxpayer identification number. Taxpayer Identification Number, or TIN, is usually a Social Security Number for U.S. citizens, or a Social Identification Number, or SIN, for Canadians. For addresses, P.O. boxes and accomodation addresses are explicitly disallowed for accounts opened after October 1, 2003.

Almost all financial institutions require goverment-issued ID for the CIP process, although many banks are accepting the Mexican matricula consular card in an effort to garner the business of Mexican nationals who may not have identification documents issued by U.S. agencies.

Enhanced Due Diligence is a program where banks monitor their customer's activity on an ongoing basis for illegal activity or suspicion of illegal activity. Bank compliance officers are looking for evidence of terrorist financing, transactions with blacklisted entities, fraud, check kiting, identity theft, tax evasion and money laundering.

Enhanced Due Diligence screening is usually done by data mining account transaction records, looking for patterns that might be indicative of these crimes. Many firms offer software packages to help automate the data sifting, but similar results can be obtained with basic data analysis tools like a spreadsheet, as long as criteria are previously defined. It's worthwhile to keep grandfathered bank accounts that date from before the Patriot Act. These accounts, and accounts at the same institution, are not subject to Customer Identification Program requirements.

In other words, if you are a long-time customer of a bank, but that bank doesn't already have a full CIP profile on you, they are not required to collect all of the CIP information for you to open additional accounts or financial products with them. Sometimes bank procedures encourage account representatives to collect the information, but most do not.

Be aware that this only applies if you are a grandfathered, existing customer of the bank. If you have previously closed all of your accounts with that institution, you're classified as a new customer for purposes of the Customer Identification Program and will have to supply all of the ID and documentation required of a new customer. Accounts opened after October 1, 2003 cannot be opened with P.O. box or commercial mailbox, as many people used to do to preserve their privacy.

Keeping those grandfathered accounts around, with minimum balances if necessary, can save you from having to provide information that you'd rather not provide to open an account in the future. This includes keeping your old accounts open when you move, especially if you are going to open a new account at the local branch of the same institution at your new home or office.

Remember, though, to keep old account checkbooks and paperwork in a very secure location with the rest of your financial documents.

Residential WiFi mapping database revealed

Skyhook Wireless has been scanning American neighborhoods for WiFi access points and putting them into a database. So far they've got 16 million detected wireless access points, covering the majority of the U.S. and Canadian population.

Remember again, if computer privacy and security are more important to you than convenience, don't network without wires. Information is out of your control once it hits the airwaves.

Comparison of Prepaid Credit Cards

Ryan Barrett at snarfed.org has an updated essay on protecting your privacy with prepaid credit cards and gift cards.