By Tracey Wells
Understanding the process of shopping for auto insurance quotes is critical in receiving the best offer from an insurance company. The process of calling different insurance companies and agents is a taxing process. Giving the same information repeatedly is unnerving and going to an Internet site to get multiple quotes can unknowingly unleash a beehive of calls from up to 30 agents.
There are best practices to get the most accurate and competitive auto insurance quotes. Most of the conjecture you have heard over the years on getting quotes is flat wrong. Be honest and give the most accurate information you can. Credit does matter, whether you agree with the industry reasoning or not. Most states use what is called an Insurance Score to rate your household. The insurance score is calculated and pulled in from a database called LexisNexis Claims Report, sometimes referred to as the CLUE Report (Comprehensive Loss Underwriting Exchange). Most insurance companies report to LexisNexis.
The Insurance Score is divided into three sections: credit score, claims history, and prior coverage history. The credit score portion is a soft hit and does not affect your credit rating. The claims history ties into credit because stats have shown that individuals with the better credit scores have a lower frequency of filing claims. While those with poorer credit scores tend to file claims quicker without analyzing the situation fully. Sometimes, those with poor credit histories may be tempted to file a claim that could be on the fringe of fraud. The prior coverage history is important because people who change insurance carriers like they change their socks tend to file more claims and it is never beneficial to change carriers over a minimal savings. Most carriers will not offer their best rates to you if you change insurance carriers often.
When it comes to auto insurance quotes be up front about all the household drivers whether you intend to cover them or not. Be up front about any tickets or accidents. The carrier WILL find out about tickets and accidents. Most insurance carriers go back 3 years on auto insurance for tickets and claims. Your Motor Vehicle Record and claims record will be verified and any infractions within that 3-year period will adversely affect your rate. One of the most common surprises to customers is that “zero point” tickets still goes on your Motor Vehicle Record. The insurance company will still factor in the “zero point” ticket, therefore adversely affecting the rate. Sometimes the Motor Vehicle Record may incorrectly report an accident as at-fault when the police report showed it was fault-free on your side. Keep copies of those police reports.
Anonymous quotes done online are worthless. Most people do an anonymous quote with a fake name and address with their real zip code and age thinking they will avoid having a sales rep call them. I understand why someone would want to avoid a bunch of calls. But these quotes are neutral and far from accurate. If you have a great credit score, an anonymous quote won’t factor that in and you will unknowingly miss out on a very competitive quote. If you have a poor credit score, the quote will more than likely drastically increase when you try to bind coverage using your real name, address and your actual date of birth. So don’t do the “anonymous quote” online, it won’t help you.
Higher limits of liability (bodily injury and property damage) many times gets you a better actual cost of insurance. Higher liability limits also helps protect your assets in the event of a major at-fault accident. If you own your home, never settle for the state minimum limits. If you have state minimum limits for bodily injury and property damage, you are underinsured and a major claim could severely alter your lifestyle with a loss of assets or garnishments.
Because of the increasing rates, many people are opting to not disclose some drivers in their household or add them on their current policy. That can cause problems if a claim is filed (a subject for another article). Many insurance companies are implementing a Discovered Driver Program. It will pull records of people who may currently live or previously lived in your household. If the individual(s) are no longer in your household, you may need to provide documentation showing they no longer reside there. Check to see if there are discounts for bundling your Homeowners/Condo or Renters Insurance. You also can inquire about discounts for Life Insurance and Business Insurance if you are a business owner. Other common discounts out there are the Defensive Driver Discount, Good Student Discounts for students under 25 and affinity discounts based on select occupations or colleges and universities. Lastly, resist the common mistake of an “apples to apples” comparison with your current carrier. Most of the time you are probably underinsured and getting another quote keeping you underinsured is not going to improve your insurance/risk management situation. Keep these tips handy when you are ready to shop for insurance. Be honest, disclose all the information requested for a best quote offer.
Tracey Wells is an agency owner of Farmers Insurance in Grayson, Georgia.