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Insurance Companies Conduct Extensive Evaluation for Motor Vehicle Insurance


Your clean credit history and occupation might save you more money when getting motor vehicle insurance. Insurers are including these variables to determine the policy premium of applicants.

In pricing a policy, there is a general trend for the auto insurance industry in examining more details about you and your behavior when it comes to managing your finances. Before, insurers based their premiums on limited information – such as the applicant’s type of car, age, marital status, driving record and the geographical location of work and residence.

Before applying for motor vehicle insurance, make sure that you do not have a bad credit record and your credit history is in good shape since your personal data would be now subject for scrutiny. Insurance companies can access your credit report and monitor your credit card activities whether you have made late payments or not. Some states are allowing this practice.

An insurance company includes a credit report as one of the factors in appraising your motor vehicle insurance rate. They believe that there is strong connection between your financial behavior, credit management and insurance claims.

The type of car you drive is also important in assessing your policy premium. Insurers study the claims for damage and theft for your vehicle type. They also consider cost of injury and damage if it crashes to other automobiles.

This extensive evaluation is actually beneficial to clients who are applying for motor vehicle insurance. In the past, there were only seven pricing tiers, forcing clients to pay policy premiums less suitable for them.

There are now nearly 400 pricing tiers. These policy prices are almost customized for each client.

This new development does not confine you anymore with the type of car you are driving or the traffic situation in your residence and office as well as your age.  You have a good chance of getting low premiums if you are a careful driver, with clean credit history, and have good occupation. Insurance companies are now using different systems to determine your risk score. The score you will get will be matched to a specific policy premium.

Hiring an insurance agent may also help you to further lower your premium. They know all the perks and discount programs that are being offered by insurance companies.

Some companies deduct $100 a year if you do not figure in any mishap and a five percent discount in your premium if you able to pull a year having an accident-free driving.

Inquire if your company has a forgiveness policy. Under this rule, your premium will not increase when you encounter your first car accident.