State Farm Auto Insurance Practice Test

What does a "Security Freeze on File" notification indicate?

1. The customer has agreed to lift all freezes

2. The customer has restricted access to their credit report

3. The customer can cancel their insurance policy

4. The customer is not eligible for coverage

The correct answer is: The customer has restricted access to their credit report

A "Security Freeze on File" notification indicates that the customer has restricted access to their credit report. When a security freeze is in place, it prevents potential creditors from accessing the consumer's credit report to evaluate their creditworthiness. This is a protective measure typically used to deter identity theft or fraud, as it makes it more difficult for identity thieves to open accounts in someone else's name. In contrast, the other options do not accurately reflect the purpose of a security freeze. Lifting all freezes relates to the customer's ability to grant access, canceling a policy is an unrelated insurance action without direct connection to credit reports, and eligibility for coverage is more about the underwriting criteria or compliance rather than a freeze on credit reports.