Questions Car Insurance Companies Ask & Why
UGH! But why does the car insurance company need to know my date of birth?
You may be wondering why insurers ask so many questions before giving you a quote. It turns out, each question has a purpose—and customizing your quote by answering honestly is in your best interest. Here’s Direct Auto’s guide to common insurance questions.
What’s your address?
In most cases, an insurance company will take your geographic location into account when setting your rates.
Insurers will drill down to your ZIP code to examine the number of stolen cars in your neighborhood, the number of vandalized cars, the history of severe weather (such as tornadoes), and similar risk factors.
If you live in an urban area with lots of traffic and crime, you could pay more for insurance than if you live in a rural area with very little traffic and very little crime. In urban areas, you’re sometimes more likely to file an auto insurance claim because the statistical probability that you’ll be in a wreck or have your car broken into is higher than it would be farther from the city.
What kind of vehicle do you drive?
Not all cars are insured at the same rate because not all cars are the same. For example, if you own a car with a poor safety rating or with high repair costs, you’ll likely pay more to insure it. However, if you own a car with an excellent safety rating and low repair costs, you’ll probably pay lower premiums.
How do you use your vehicle?
This question is designed primarily to find out how much you drive your car. For instance, if you use the car to commute to work or school, you’re more likely to get into a wreck than if you take your car out for a spin only on the weekends.
If you use the vehicle for business purposes (like to deliver birthday cakes), this question can also help the insurance company offer coverage that fits your unique needs. You may qualify for commercial auto insurance when you use your vehicle for activities related to your business or job.
What is your date of birth?
Studies show younger drivers—particularly those under 30—are a higher risk than older drivers. Why? Because younger drivers tend to be more easily distracted, are less experienced behind the wheel, and, are more likely to crash—statistically speaking.
What is your gender?
Sorry, guys. The numbers are in and they say that male drivers are more likely to get into wrecks than female drivers, and they also tend to drive more than females do. Therefore, male drivers generally may pay more for car insurance than female drivers do.
What is your marital status?
Your marital status helps an insurer predict how risky you are as a driver. Generally, insurers view married drivers as more responsible behind the wheel and, therefore, less likely to get into a car accident. As such, married drivers often pay less for car insurance than singles do.
Have you had auto insurance in the past 90 days?
If you lack car insurance, an insurance company may consider you a riskier driver than if you’re already insured. In most states, drivers are required to carry liability insurance. This question may also be phrased as, “Have you had a lapse/gap in your insurance coverage in the last year?”
How would you rate your payment history?
An insurer wants to make sure you’re going to pay your premium consistently. In addition, statistics show that individuals who are careful with their finances tend to be a better risk when it comes to auto insurance, so it might look at your history of paying a variety of bills, including rent and credit cards. In many states, insurers are allowed to use what’s known as a credit-based insurance score to help set your rates.
How many accidents have you had in the past three years?
Have you been in a couple of crashes in the past three years? If so, you likely filed a couple of claims. To an insurance company, this means you could be a risky driver, and you might be inclined to file more accident claims. Accidents usually remain on your insurance record for three to five years.
How many traffic tickets have you had in the past three years?
A bunch of traffic tickets in the past three years, mainly for offenses like speeding or DUI/DWI, signals to an insurer that you might need to brush up on your safe driving skills. In turn, that means you might take more risks on the road and ultimately cause a crash.
Do you have other household members age 14 and above?
If there’s a teenager in your household who’s driving your car, then your car insurance premium will reflect the fact that an inexperienced driver gets behind the wheel. Data shows inexperienced drivers are involved in a higher share of crashes than experienced drivers are.
On the other hand, this is also an opportunity to exclude a driver in your household. An excluded driver is a person who is not covered at any time while driving your vehicle—even if they end up driving your car in the event of an emergency. By excluding them from your policy, you are formally acknowledging that they will not drive your car and your car insurance company will rate your policy accordingly.
Do you own a home or townhome?
If so, you could qualify for a special homeowners discount on your car insurance !
Questions can be annoying, but they can also help you get the right car insurance coverage at the right price! Direct Auto car insurance quotes are fast and easy. Get a quote online, over the phone, or in person at your local Direct Auto!