Social Security Number Privacy: South Dakota's Auto Insurance Conundrum

In South Dakota, auto insurance is required by law for anyone who licenses or operates a motor vehicle. While it is unclear whether or not a social security number is required to obtain auto insurance in South Dakota, it is common for auto insurance companies in the United States to request a social security number to verify identity and check credit history and criminal records.

Do you need a Social Security Number to buy a car in South Dakota?

In the United States, a Social Security Number (SSN) is a nine-digit number assigned to citizens, temporary or working residents, and permanent residents. SSNs are used for identification and tracking income, benefits, and credit history. While it is not a requirement to have an SSN to buy a car in South Dakota, it is highly recommended.

If you are paying in cash for a vehicle, you may not need to provide your SSN. However, if you are financing or leasing a vehicle, you will likely need to provide your SSN at some point during the process. This is because almost all purchases over $10,000 need to be reported to the Internal Revenue Service (IRS), and the distributor will need your SSN for this. Additionally, if you are applying for a loan to purchase a vehicle, you will typically need to provide your SSN.

It is important to note that each state may have different requirements, and some states may require an SSN to purchase a car. It is always a good idea to check with the specific state's requirements before making a large purchase such as a vehicle.

Furthermore, while not a requirement, providing your SSN when purchasing car insurance can help you obtain lower insurance rates. This is because insurance companies use your SSN to review your credit history and criminal record to set your insurance rates. If you do not provide your SSN, you may be considered a high-risk driver and may have to pay higher insurance rates.

Do you need a Social Security Number to get a driver's license?

In the United States, Social Security Numbers (SSNs) are assigned to citizens by the Social Security Administration. SSNs are often required when applying for a driver's license, as they help verify an applicant's identity and are used to pull reports that confirm the information provided during the application process.

In most states, auto insurance companies require your SSN to check your credit history and criminal record, which helps determine your insurance rates. However, some states, such as California, don't require your SSN when applying for insurance.

If you are not eligible for an SSN, you must complete a Social Security Number Affidavit, certifying that:

• You have never applied for an SSN.
• You have never been issued or assigned an SSN.
• You are not eligible for an SSN.
• You applied for and were denied an SSN due to ineligibility.

It's important to note that providing false information in this affidavit can result in the cancellation of your driver's license and may lead to criminal charges.

What are the pros and cons of giving your Social Security Number to an auto insurance company?

While it is not required by law to provide your Social Security Number (SSN) to an auto insurance company, there are pros and cons to doing so.

Pros

An SSN is often required by auto insurance companies as it makes it easier to pull reports that verify the information you have provided during the quoting process. This is an important step in finalizing the premium amount you will pay.

Auto insurance companies can use your name and home address to pull your motor vehicle record, but they are likely to get a higher level of accuracy if they also use your SSN.

Obtaining your SSN allows the insurance company to run a credit check. Credit history has been shown to offer information that is a good predictor of the likelihood that someone will file an insurance claim.

Cons

Giving your SSN to the wrong person could result in identity theft.

If you refuse to provide your SSN, your insurance company may interpret your reticence as proof that you wish to hide an incriminating activity or event that took place in the past, or that you wish to hide a previous identity or alias. This could cause your insurance rates to increase. Your insurance company might also report your refusal to one of the national credit bureaus, which could negatively impact your credit score.

What happens if you don't give your Social Security Number to an auto insurance company?

Not all auto insurance companies require your Social Security Number (SSN), but most will ask for it. If you don't provide your SSN, you may have to pay higher insurance rates.

Auto insurance companies use your SSN to check your credit history and criminal record to help determine your insurance rates. They also use it to verify your identity and assess your creditworthiness. If you don't provide your SSN, the insurance company may not be able to accurately assess the risk you pose as a driver, and so they may consider you a high risk, resulting in higher insurance rates.

If you are uncomfortable providing your SSN, you can ask the insurance company about alternative ways to verify your identity and assess your eligibility for coverage. Some companies may offer alternative options, such as requesting additional documentation or using other identification numbers.

It's important to note that auto insurance companies are legally required to protect your personal information, including your SSN. Reputable companies have safeguards in place to secure your data. However, it's always good to be cautious when providing sensitive information. Verify the credibility of the insurance provider and only provide your SSN if you feel confident in the company's credibility and the necessity of the request.

What other information do auto insurance companies need?

Auto insurance companies require a lot of information to determine your insurance rates. While some of this information is provided by you, they also source information from third parties. Here is a list of information that auto insurance companies will need from you:

• Basic personal information: This includes your full name, date of birth, marital status, occupation, and professional affiliations.
• Driver's information: The number of drivers in your household, their ages, sexes, years licensed, and type of license. For student drivers, their grades may qualify them for a discount. Information on safe driving courses completed is also required.
• Vehicle information: Make, model, year, vehicle identification number (VIN), safety features, anti-theft devices, and annual mileage.
• Insurance information: Details of your current insurance coverage, including the declarations page, and a letter of experience from your previous insurer.
• Financial information: Your preferred liability coverage and deductible, as well as information on existing policies such as homeowners insurance.

In addition to the information provided by you, auto insurance companies will also source information from third parties to assess your risk as a driver and determine your insurance rates. This includes:

• Driving record: Your motor vehicle report (MVR) details any accidents, tickets, or driving under the influence (DUI) infractions. While most states only include this information for three years, some states keep records for up to 10 years.
• Claims history: Your Comprehensive Loss Underwriting Exchange (CLUE) report shows all claims filed, whether accident-related or not. This information helps insurers determine your likelihood of filing a claim.
• Credit score: Insurance companies use your credit score to assess your risk as a driver and set your insurance rates. A higher credit score can lead to lower insurance rates as it indicates a lower likelihood of filing a claim.

Frequently asked questions