State Farm Auto Insurance Practice Test

What is one purpose of the Customer History Request (CHR) Freezes?

1. To automatically approve insurance applications

2. To assess rates without customer consent

3. To allow customers to lift credit freezes for insurance eligibility

4. To limit policy changes based on claim history

The correct answer is: To allow customers to lift credit freezes for insurance eligibility

The purpose of Customer History Request (CHR) Freezes is to allow customers to lift credit freezes for insurance eligibility. When a customer has a credit freeze in place, it can restrict access to their credit report, which is often required for underwriting insurance policies. By enabling the customer to lift these freezes, insurance companies can effectively assess the individual's credit history, which can impact their eligibility and the rate offered for insurance coverage. This process is crucial in ensuring that consumers are treated fairly while also allowing insurers to make informed decisions based on accurate, up-to-date information. Other options do not align with the primary function of CHR Freezes. For instance, automatically approving insurance applications would bypass necessary evaluations, while assessing rates without consent would violate privacy norms. Additionally, limiting policy changes based on claim history is unrelated to the functionality of customer credit access.