Getting an Auto Insurance Quote - Are You Eligible for the Best Rates?

Since the mid-1990s, insurance companies have tightened their eligibility requirements for new policyholders. In addition, the entire insurance industry has bound together to relay information between them. Allstate Insurance has just as much vested interest in the information contained in these reports as Nationwide Insurance and other leading carriers do. This is all to keep policyholders from being dishonest or simply inaccurate regarding their insurance history. Each secret below is no secret to the insurance carrier you're getting a quote from.

Secret number one
Standard insurance carriers run credit checks prior to giving you an auto insurance quote. These are referred to as Financial Responsibility Scores. The insurance agent can't see the report but rather it goes through the system and simply tells the agent whether or not you are eligible to be written in that company. If you are not eligible, you can still get a quote but it will be with a higher rate. Although these are not the same credit reports as when you apply for a loan, the report does affect your eligibility and your rates.

Secret number two
Any claim you've submitted in the past 10 years is visible to anyone in the insurance industry. Insurance companies have developed reporting procedures to inform each other of claims called an Auto loss history report. If you've submitted many small claims or even one big claim, you'll either be charged more or you won't be eligible for a standard policy at all.

Secret number three
There could not be a more important secret. Never, ever let your insurance cancel. The most steadfast rule in the insurance industry is proof of prior insurance. If you are uninsured for over 30 days, you can bet on higher insurance prices for at least the next year. Not only will being uninsured put you into a higher premium bracket; you may have to stay there for a period of time before the company will consider lowering your rates.

Sure, there are benefits to keeping your business with the same company for several years but it's also good to shop and compare pricing. By keeping these three things in line, you're more likely to get the best rate possible.