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What your auto insurer knows about you



What your auto insurer knows about you

In order to give you an accurate rate an insurance company needs to gather certain information about you. Getting accurate and thorough information means receiving a correct quote. No one minds if the price goes down because information changes but if the price increases then people tend to get angry. If the price changes due to information found out after your policy is started, than you can be sure to get an additional premium notice. So let us discuss what information an insurance company needs to receive from you.

The first thing that an insurer, meaning the company that you have asked to insure you does is to run a motor vehicle report (known as an MVR) on you. The state provides an MVR, but typically, insurers get them from companies like ChoicePoint or directly from state records. It shows what tickets you were charged with during the dates specified in the search. In some states like Pennsylvania, there is also no such thing as an "at fault" accident on your MVR. Your MVR report will only show if you have been involved in an accident as a driver. In other words, if you are pulled over at a stop sign and someone crashes into you, it is clearly not "your fault". In Pennsylvania, the accident will appear on your MVR. You will need to get a copy of the police report for the insurance company; otherwise, some companies will assume it was your fault. Most insurance companies will check your driving record up to 3 years back, although some will go back even further. Further searches are typically up to 5 years back.

Any violation or accidents that you were charged with will show up on your MVR. This report will also usually show the status of your driver's license. This will inform the insuring company if your license is valid, expired, or suspended. Personal information shown on this reports will include the current address you provided, your social security number (although some MVR reporting companies do not list this information) and your date of birth. The MVR will list how many identification cards or licenses you have had. The report also shows the number of license suspensions you have had in the past.

C.L.U.E. reports are another report used to gather information. This report is used to see what type of claims you have filed or have been filed against you. These may or may not be your fault, but if an insurance company paid out money on your behalf, it will show up here on this report. The clue report also may be used to list all the people in your household. This will show all those who have the potential to drive your vehicle. It will show the status and license number of all the household residents. If the people listed will be driving your vehicle then their motor vehicle records will also be run. If the C.L.U.E. report does not offer enough driver information, Additional Driver Discovery reports can find all licenses registered at an address.

Credit reports could also be used by an insurance company to rate you. The insurance company will usually give you a rate then verify your credit score using your full name and social security number. The best prices are for those that have good credit. You may have a spotless driving record but if you have poor credit you might not get the cheapest rates. Use of credit is controversial, but until insurance companies find a better indicator of risk, it will be used as a rating factor.

Insurance companies also know where you live and which cities are the busiest and most congested. Every county has its own territory rating based on population, number of accidents and/or claims occurring in it and age demographics. The biggest cities are the most expensive for insurance premiums while the counties that are considered to be more rural will be cheaper to be insured in.

As you can now tell, the insurance company does its background research on potential policyholders. The more the company knows about you, the better it is for you. Not only does it allow for the most accurate rate, but also it assures that claims are paid correctly and with no delays.


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