What Do Car Insurance Companies Look at for Accurate Quotes?

Underwriters can only ensure success by adequately gathering information and processing it to calculate accurate auto insurance quotes. It is in the best interest of both policyholders and them that all the relevant facts are considered and fair premiums determined. Factual details can help good motorists save money while further negative revelations can hurt people with poor driving, credit and personal records.

What Do Vehicle Insurance Companies Look at in Records?

They rely on several reports and information sources to gather relevant facts. Some of them may want to confirm certain set of details before quotes are offered or just before coverage placed. And some may choose to examine the facts only after a questionable claim. Therefore, it is important that details you provided in proposal forms are correct. Otherwise, you may face problems or a claim rejection.

Large parts of our lives are now public records and there are firms specialized in providing comprehensive reports on certain aspects of it. You are probably aware of a few of the sources and details obtainable. A recent revelation on these checks can affect rates and be the answer to the question of why did my automobile insurance go up? Here are what they can learn about you, the car, driving history and other particulars whenever they like.

  1. Do Car Insurance Companies Check Credit?

After a long debate and countless studies it is generally agreed that there is a relation between credit score and claims. Only three states -California, Hawaii and Massachusetts- don’t allow use of it in premium calculations. And about 90% of carriers use it in risk assessments.

A credit score is derived after taking types of credits, outstanding facilities, payments and length of history into account. Two popular sources of this information are FICO and Experian. Using these details and own formulas carriers come up with insurance credit score.

There are a few places you can obtain it free or at a reasonable cost. Premiums can go up or down about 20% depending on how good the score is. Therefore, it is highly advisable to keep a close eye on how you are doing with the bills and other dues. Also, it can help you get lower mortgage and loan rates.

  1. Do Vehicle Insurers Check Past Claims?

auto insurance checksGeneral assumption is that past driving history is a good indication of how you will do in the future. Each reports every incident to a central databases called C.L.U.E. (Comprehensive Loss Underwriting Exchange). Then, they can access this claims report which goes up to 7 years and includes names, what happened, who was at fault, policy and vehicle details and amount settled. This information allows them to provide accurate car insurance quotes.

Everyone would normally know the claims they made. In case you want to find out what is on records you can ask and get this report free of charge from some providers like LexisNexis. Generally, most of them would ask about last three years and some for five. You just have to answer the question on the proposal form to the best of your knowledge. There is no hiding if you have made a claim as it will come out eventually.

If you have one older than 3 year but less then 5 you may want to look for carriers that only look back 3 years. This will probably save you money and you would not be hiding anything.

  1. Do Insurers Check Driving Records?

Most motorists know that they are somehow obtained and affect rates. These violations and point deductions are registered by DMV office. You should really know what tickets you have been issued and how it went on the record. Nonetheless, local DMV office should be able to pull this for you for a nominal fee.

Each has own system of finding out about how good a motorist you have been so far. How often they look at this information usually depends on the company and how clean they are so far. Also, you may get lower prices with providers that only look back 3 years if some of the points drops off after this period.

  1. Can Insurers Check Vehicle Registration Status?

Make, model, year and past history of the automobile are used in premium calculations. They can quickly find out about where it has been, who owned it and what happened to it. The report they pull about the auto would include basic details as well as who owns it and if it has ever been salvaged, rebuilt, junked or flooded. Carfax provide similar services for fee if you want to learn the background of a used auto you are considering purchasing.

  1. Personal Data for Accurate Automobile Insurance Quotes

Most details you provided to them can be checked for accuracy. They can identify you, find out about property ownership, bankruptcy history and criminal record. Some of these are already in a credit score report and others can be gathered quickly. So, every question asked during a quote process should be answered correctly to avoid embarrassments and fall outs.

  1. Any Break in Coverage

You usually get questions about lapse in coverage, cancellations and special conditions imposed previously. There is no point in hiding anything or withholding information as they can check and verify these whenever they want. It is better that you come clean and get accurate vehicle insurance quotes.

These reports include the names of previous carriers with policy periods, coverage limits as well as any cancellations, lapses, special conditions imposed and reinstatements. Particularly lapses are considered an indication of risk and can affect the premium. Therefore, you should try to keep continuous coverage.

  1. Undisclosed Drivers Check

Normally, they want to know about all the drivers in your household. You will be asked questions about them. You should disclose any person living with you and have a license. You may be able to exclude some people and avoid paying extra due to their bad driving, providing the state allows such exclusions. If you do this, you must make sure that an excluded driver never access the vehicle.

You may run into serious problems if this is discovered after they cause an accident with the vehicle. They can turn around and refuse to pay for the damages. It is not hard to cross reference and find out who has been living in a particular address at a particular time. Most of these details are public knowledge and credit reference agencies link those people living in the same household together as well.

Naturally, carriers don’t want to lose out on premiums because people didn’t disclose young and bad drivers in their household. In some cases, they can press criminal charges on the bases that you tried to defraud them by withholding material information in a view to get lower rates. What you can lose when you hide a youngster can be more than what you can gain. They may not feel the need to inspect every applicant. But they may want to investigate every little thing when they receive a suspicious claim. That is why it is better to disclose all the drivers and get true car insurance prices.

  1. Mileage Check

You get good discounts from most providers if you travel less. So, they have vested interest in the accuracy of mileages reported by policyholders. There are so many ways of confirming the actual distance travelled annually. First of all, each time the auto is serviced odometer reading is recorded. When you register a new vehicle you are likely to declare the mileage as well.

Some of them can ask proof any time or they can check it themselves. There are firms that provide reports on the usage of a particular vehicle. They can tell how many miles they have been driven, if they are being used for business or daily commute and how far is the commute. These are essential details especially when they offer auto insurance discounts for low mileage drivers.

  1. OFAC Reports

Federal government requires carriers to confirm the names of policyholders especially before settling a claim. The names are checked against a list published by Office of Foreign Assets Control (OFAC) which is part of the U.S. Department of the Treasury. This list contains people who are being suspected of terrorism, production of weapons of mass destruction and international drug trafficking. They only report back if they found something.

      10.  Social Networks Check

Lately claim adjusters and handlers have been looking online to find out the truth about a particular person or incident. People willingly share their activities online through social media. For example, a few people published photos of recent mountain climbing trip when they are claiming for serious injuries and got busted.

Social media is very powerful in many ways. You can use it to find special offers on Facebook or Twitter. Or share intimate details of your life and prove yourself to be a liar. The best policy is to assume that truth will eventually come out. Then, you would see the importance of providing reliable information especially when it changes the premium amount.

There are many ways of qualifying for discounts that you don’t need to take risks. You will find plenty reading on this site on how to cut costs down with precise auto insurance details. Take advantage of all the discounts you can get and avoid surcharges.