What Auto Insurers Know May Surprise You
In today’s information age, you really shouldn’t be surprised by how much your auto insurance company knows about you. The company has to know about your past because that’s really the only way it can make assumptions about your future. No doubt people can and do change. But in the case of auto insurance, your past helps insurers determine whether or not they want to insure you and if they do, at what cost.
The list is long
Among the information an auto insurance company has access to includes your driving record, your credit history, your auto insurance claims history, and your personal information. Much of this information is collected right from the insurance application that you complete. Motor vehicle records easily confirm what you’ve stated on that application.
What happens next?
The information collected is fed into software, evaluated, and scored. That score, called the insurance risk score, represents the likelihood that you’ll file a claim. The more likelihood there is, the greater the risk you pose to the auto insurance company.
Once your risk is determined, the auto insurance company can determine whether or not it will offer you coverage. If it will, the score helps determine the price you’ll be required to pay for the coverage you request.
Why look at your credit?
Some drivers don’t understand why or how their credit history plays a role in determining auto insurance eligibility and cost. The reason isn’t that complicated. You see, your auto insurance premium is a bill like any other bill. If you have a poor track record of paying your bills, the insurer assumes you may not pay your premium on time or at all.
It goes even further by making the assumption that if you handle credit irresponsibly, you may drive irresponsibly, too. Irresponsible drivers are higher-risk drivers.
Never lie or omit information
The information you submit is easily confirmed by accessing your driving record which the auto insurance company can and will do. That’s why you should never omit speeding tickets, DUI offenses, or other traffic violations from you application.
If you do, you could be found guilty of fraud or misrepresentation, both of which are serious offenses. Either can also trigger a policy cancellation or an increase in your auto insurance premium.