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How Do Auto Insurance Companies Check Your Background?

How Do Auto Insurance Companies Check Your Background Blog

Taking out auto insurance is a serious business; so much more goes into it than you might know. You may already be aware that auto insurance companies look into your driving history before offering you insurance. However, do you know they research your financial records and criminal history as well? Do you want to know how and why most insurers carry out this exercise? We’ll be revealing it all in this video!

Hi, and thanks for joining me in today’s episode! I’m Fincrew brand ambassador, Stella. When taking out insurance policies, it is often vital you understand all that goes into it. Knowing all you can about the factors insurance companies research about you before issuing you a policy is a big part of preparing yourself for it all. That is why, this series–Insurance360 Video was initiated to help vehicle owners gain a deeper understanding of how the insurance world works. Make sure you’re not left out of the loop! Join our circle and get insightful information on all things insurance! All you have to do is hit that Subscribe icon and enable notifications!

One important thing you need to note about insurance generally and auto coverage specifically is that it is all about risk. There’s the possibility that you won’t end up costing your insurer more than you pay as premium. Similarly, there’s also the chance your insurer will end up spending more on maintaining your policy than what you pay as premium, in which case, they lose out. That is why risk evaluation is crucial to auto insurance. It has a direct bearing on what you end up paying as your premium.

Low Risk Equals Low Premiums, And High Risk Equals High Premiums

To accurately determine the level of risk offering you coverage poses, insurers will check the following about you:

  • Your driving history
  • Your credit and financial history, and
  • Your criminal history

Your Driving History

This is usually the first and fastest detail that auto insurance companies can look up when preparing to offer you coverage. It is imperative to insurers because they believe that how you drove in the past is the clearest indicator of how you’re likely to drive in the future. Every auto insurer has a tool for looking into your driving history on their computer. If your history is filled with cases of filing at-fault claims, you can expect your premium to be huge.

Your Credit Record

The next thing they look over is your financial background. The primary motivation for doing this is to ascertain whether you’ll be able to pay what is expected of you as a premium. To do this, many insurers will usually use the credit information you filled in when applying for the policy to get in touch with your bank.

Your Criminal History

Certain criminal acts are actually relevant to your auto insurance policy. For example, if you’ve ever been involved in a hit and run, this might influence whether or not your insurer will extend your coverage. This is regardless of the outcome of the case. Sometimes, simple tools like search engines are more than enough to reveal a criminal record. In other cases, your insurer might reach out to the police force to request information about you.

We’ll be revealing more on this in subsequent videos, so be sure to stay tuned! Subscribe to this channel, and don’t forget to turn on notifications. See you in our next video!

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