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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's 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.
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 stopped 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 drivers 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 drivers 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.
Clue 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.
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. You are then rated on a tier
system. 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.
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 policy holders. The more the company knows about you, the better it is
for you. Not only does it allow for the most accurate rate, but it assures that
claims are paid correctly and with no delays.
Disclaimer: This article is for information purposes. It should not be
interpreted as a recommendation to buy or sell any insurance product, or to
provide financial or legal advice. This information is provided for information
purposes only.
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