Why When Shopping Auto Insurance, You Are Asked About Your Previous Insurance?

When shopping for auto insurance, you have to provide a lot of information. The reason for this is  an insurance company needs to properly assess you as a risk, and to find a car insurance policy that is best for you. The questions an  insurance company asks is to assist in  pre-qualifying an insurance policy.  At this time, a good insurance agent will take time to make sure your coverages are adequate for what you need.

To explain why insurance companies and agents ask this information, we are going to explain in a Question & Answer format.

Do You Currently Have Insurance?

Answer: Helps assess risk of driver. Statistics show people who have previous insurance are a lower risk to insure than someone without insurance.  If you have previous insurance, you will most likely get a better rate.

How long have you had insurance with the current company?

Answer: Drivers who have maintained insurance for a long period are a lower risk to insure. Its is proven that people who stay with their previous company for a long period also stay with a new company for as long.  Drivers with 3 years with the same company are going to get the best discount.

What company are you with?

Answer: The agent or company needs to know if you are with a standard company or a non-standard company. Naturally a standard driver, with a standard company, is less risky to insure. Therefore they will most likely get a better rate.

What are your current liability limits?

Answer: People who are underinsured are a  higher risk to insure. If you don’t carry at least 100/300 liability limits or higher, your current policy is lacking coverage.  If you carry 100/300 or higher, you are less of a risk to insure, therefore you will most likely get a better rate.

Overall,  insurance companies ask these questions as a determining factor on how they will set up an insurance policy and how much premium needs to be charged. If you have had continuous insurance for 3 years with 100/300 limits or higher with the same company, you are going to be a prime risk when shopping around on auto insurance. If you would like an auto insurance quote, please contact us.