Auto insurers can only ensure their success by adequately gathering information and processing it to calculate accurate car insurance quotes. It is in the best interest of both policyholders and insurers that all the facts relevant to insuring a vehicle considered and fair premiums agreed. Detailed information can help good drivers save money while further revelations of negative records can hurt people with poor driving, credit and personal records.
What Do Auto Insurance Companies Look at in your Records?
Vehicle insurers rely on several reports and information sources to gather relevant facts in order to offer accurate automobile insurance quotes. Depending on the company, certain set of details may be confirmed before premiums are offered or just before coverage placed. And some providers may choose to check the facts only after a questionable claim. Therefore, it is important that details you provided in quote forms are accurate and 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 detailed 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 your rates and be the answer to your question of why did my auto insurance go up? Here are what details they can collect about you, your car, driving history and other particulars whenever they like.
- 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 automobile insurance claims. Only three states -California, Hawaii and Massachusetts- don’t allow use of credit score in premium calculations. And about 90% of carriers use it in their risk assessments.
A credit score takes your payment history, outstanding credit facilities, types of credit and length of credit history. Insurers use providers like FICO and Experian to pull your credit score. Using these details and their formulas they come up with your insurance credit score.
There are a few places you can check your credit score and get a report free or at a reasonable cost. Your premium can go up or down about 20% depending on how good your credit history is. Therefore, it is highly advisable to keep a close eye on how you are doing with your payments. Also, a good credit score can help you get lower mortgage and loan rates.
- Do Car Insurance Carriers Check No Claims?
General assumption is that your past driving history is a good indication of how you will drive in the future. Therefore, car insurers check past claims of their policyholders and new applicants. Companies report every claim to a central databases called C.L.U.E. (Comprehensive Loss Underwriting Exchange). Carriers can access this report which contains up to 7 years of auto insurance claims made by you with policy, vehicle, claim, loss information 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 your records you can ask and get this report free of charge from some providers like LexisNexis. Generally, most companies would ask about last three years of claims and some check for 5 years. You just have to answer the question on the quote 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 a claim older than 3 year but less then 5 years you may want to look for car insurance carriers that only look back 3 years. Most ask for only last three years of claim history.
- Do Insurers Check Driving Records?
Most motorists know that their driving records are somehow obtained by their insurers and it affects your vehicle insurance rates. These violations and point deductions are recorded by your DMV office. You should really know what tickets you have been issued and how it went on your driving license records. Nonetheless, your local DMV office should be able to pull this report for you for a nominal fee.
Companies have their own system of finding out about how good a driver you have been so far. How often do vehicle insurers check your driving record usually depends on the company and how clean your records are so far. Also, you may get lower quotes with car insurance providers that only look back 3 years if some of the driving licence points drops off your record after 3 years.
- Can Insurance Carriers Check Vehicle Registration Status?
Make, model, year and past history of your automobile are key details in premium calculations. Your insurer can quickly find out about where your car have been, who owned it and what happened to it. The report they pull about your auto would include basic details as well as who owns it and if it has ever been salvaged, rebuilt, junked or flooded. You can also buy extensive reports about your car or another one you are considering buying from firms like Carfax for a fee.
- Check Personal Details for Accurate Auto Insurance Quotes
Most details you provided to your insurer can be checked for accuracy. Auto insurers can check the details that identify you, find out about your property ownership, bankruptcy history and criminal record. Some of these details are already in your 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 and to ensure you get accurate car insurance quotes.
- Lapse in Auto Insurance Coverage
You usually get questions about lapse in auto insurance coverage, cancellation and special conditions imposed to insure you. There is no point in hiding anything or withholding information as they can check and verify these details whenever they want. It is better that you come clean and get accurate auto insurance quotes.
These reports include the names of your previous insurers with policy periods, coverage limits as well as any cancellations, lapses, special conditions imposed and reinstatements. Particularly lapses in the policies are considered an indication of risk and can affect your premium. Therefore, you should try to keep coverage consistently.
- Undisclosed Drivers Check
Normally, vehicle insurance providers 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 driving license. You may be able to exclude some drivers and avoid paying extra premium because of their bad driving records, providing your state allows such exclusions. If you do this, you must make sure that an excluded driver never drives the insured vehicle.
You may run into serious problems if this is discovered by the insurer after they cause an accident with the insured 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 the company by withholding material information in a view to pay lower premiums. What you can lose when you hide a young driver can be more than what you can gain. Insurers may not feel the need to investigate every applicant. But they may check every little details when they receive a suspicious claim. That is why it is better to disclose all the drivers in your house and get accurate car insurance quotes.
- Mileage Check
You get good discounts from most providers if you drive less. So, they have vested interest in the accuracy of mileages reported by their policyholders. There are so many ways of checking to make sure you are not driving more than the mileages you reported. First of all, each time your auto is serviced current mileage is recorded. When you register a new vehicle you are likely to declare the mileage as well.
Your carrier can ask you proof of mileage any time or they can check it themselves. There are companies 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 for accurate auto insurance quotes especially when they offer auto insurance discounts for low mileage drivers.
- OFAC Reports
Federal government requires insurance providers to check the names of their policyholders especially when they are making claim payments. 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 on a check if there is something to report.
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 their photos of recent mountain climbing trip when they are claiming payment for serious injuries and got busted.
Social media is very powerful in many ways. You can use it to your benefit and find special offers on an insurance company Facebook page. 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 accurate information especially when it changes the premium amount.
There are many ways of qualifying for discounts and getting cheap auto insurance that you don’t need to take risks. You will find plenty information on this site on how to cut premiums down with accurate auto insurance details. Take advantage of all the discounts insurers offer.