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Why ask about who my current insurer is?


A

Question: When I shop for auto insurance, agents and online forms ask for information regarding my current insurer. What is their interest in my current insurer information?

Answer:  There are many reasons you may be asked about your current carrier when comparing car insurance rates. The best one? It may save you some money.

Some car insurance companies may offer discounts based who you are currently insured with. For instance, if you are switching your car insurance policy from a preferred auto insurance carrier, you may receive a bigger transfer discount than if you are moving over from a non-preferred carrier.

It's a stamp of approval, really. Preferred rates require a good driving record and steady payment history.

Likewise, continuous coverage for many years with the same insurer can help you get cheaper car insurance rates as well. 

But there are other reasons.

You already know the rate with your current insurance company and are already part of a specific rating tier, so some systems are set up to not provide rates from the company you presently have your auto policy with.

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For example, if you are shopping for car insurance online and list State Farm as your current insurance provider, then the quoting system may not retrieve rate quotes from State Farm. In this situation, since you already have your own personal relationship with State Farm you should contact it directly if you want an updated quote.

Insurance agents you speak to on the phone will ask this for the same reason, especially if they are set up to give you rate quotes from multiple companies. 

Some car insurance companies have specific rules concerning switching agents when you want to continue your coverage with the same company, but with a different agent.  In this case, the agent would need to make sure these rules are followed properly.

When collecting data for your car insurance quote, auto insurers are interested if you’ve had continuous coverage -- it makes a big difference in your premium if you’ve had a lapse in coverage. By providing the company’s name, it allows your potentially new auto carrier to verify you currently have coverage with the listed car insurance company.

Insurance companies have reports they can request that verify your current or previous car insurance company and whether you’ve had a lapse in coverage. In fact, virtually all information on quote forms is verified once the underwriting process begins -- once you've seen a rate and begun a purchase. (See “Yes, the insurer checks up on you”)

Accurate information during the quoting process just ensures there won't be any surprises during underwriting.

If you ever have a question about why a certain question is asked, do what you did here – just ask.  Online car insurance comparison marketplaces typically have agents standing by for reasons such as this. 

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