Underwriting Questions: What Your Auto Insurance Agent Asks And Why

Underwriting is a key part of the insurance approval process. It involves asking basic questions about health or other relevant information, such as driving records in the case of auto insurance. The answers to these questions help determine whether the company issues an insurance policy to a prospective customer and how much that policy costs. When it comes to auto insurance, underwriting questions can include inquiries about the car, how it is used, and the driving record of the applicant.

Vehicle information

When applying for auto insurance, you will be asked a series of questions about your vehicle to determine the insurance rate. These questions are designed to assess the risk associated with insuring your vehicle and to provide an accurate quote. Here is some information about the types of questions you may be asked about your vehicle:

Vehicle Details:

You will be asked to provide detailed information about your vehicle, including the make, model, and year of your car. This information helps insurers assess the risk associated with your vehicle, as certain makes and models may have a higher risk of accidents or theft. Additionally, the age of your vehicle can impact the cost of repairs and replacement parts, which is a factor in determining insurance rates.

Vehicle Identification Number (VIN):

While you don't need the VIN to obtain quotes, it is required when purchasing the policy. The VIN helps insurers identify the specific vehicle and access its history, including any previous accidents, repairs, or modifications.

Vehicle Storage and Usage:

Insurers will ask about the primary storage location of your vehicle, including the address where it is garaged or parked most of the time. This information can impact your rates, as certain areas may have higher rates of theft, congestion, or crime. Additionally, you may be asked about the primary use of your vehicle, such as commuting to work or school, as this can affect the mileage and exposure to potential risks.

Annual Mileage:

Expect questions about your annual mileage, as the number of miles you drive each year can impact your insurance rates. Higher mileage indicates more time on the road and, consequently, a higher risk of accidents. Some insurers offer discounts for drivers who drive fewer miles, typically below 7,000 miles per year.

Anti-Theft Devices:

Insurers may inquire about the presence of anti-theft devices in your vehicle. This is because these devices can reduce the risk of theft and may qualify you for a discount on your comprehensive coverage. Different types of anti-theft devices offer varying levels of protection, so be prepared to provide details about the specific type of device installed in your vehicle.

Vehicle Ownership and Financing:

You will need to disclose whether you own your vehicle outright or if it is financed or leased. While this may not directly impact your rates, it can influence the types of coverage you need. For example, if your vehicle is financed or leased, you may be required to purchase collision and comprehensive coverage to protect the lender's investment.

The vehicle information you provide during the auto insurance application process is crucial for determining your insurance rates and coverage options. It helps insurers assess the risk associated with your vehicle and ensures that you receive an accurate quote. Remember to be honest and provide as much detail as possible to ensure a smooth and efficient underwriting process.

Driver information

When applying for auto insurance, the insurance company will ask a series of questions to assess the risk of insuring a driver and their vehicle. The answers to these questions will determine whether the insurance company will offer coverage and how much the premium will be. This process is called underwriting.

One of the most important aspects of driver information is the driving record. Underwriters will ask about any accidents, claims, or traffic violations within a specified timeframe, typically ranging from the past five to seven years. This information helps assess the risk associated with insuring the driver. It is crucial to disclose any at-fault accidents, injuries resulting from accidents, and convictions for traffic infractions. Additionally, underwriters will want to know if there have been any driver's license suspensions or revocations.

In some cases, insurance companies may request details about the primary use of the vehicle, annual mileage, and the presence of an anti-theft device. The insurance company may also inquire about the existence of a loan or lease on the vehicle and whether there is continuous car insurance coverage.

All the driver information provided during the underwriting process is essential for insurance companies to assess the risk accurately and determine the appropriate premium for the auto insurance policy.

Driving record

When applying for auto insurance, the insurance company will ask a series of underwriting questions to determine the applicant's eligibility and the cost of the policy. One of the key areas of focus for auto insurance underwriting is the applicant's driving record.

A driving record, or driver's abstract, is a comprehensive history of an individual's driving history, including any traffic violations, accidents, suspensions, revocations, and other relevant information. This record is used by insurance companies to assess the risk associated with insuring a particular driver. The driving record can also impact the cost of auto insurance premiums, with drivers who have a history of violations or accidents typically paying higher rates.

In most cases, insurance companies will look back at an applicant's driving record for the past three years for tickets and six years for accidents. However, some insurers may review records dating back up to ten years for accidents. This means that any infractions or incidents during this period can potentially impact the cost of insurance or even result in a denial of coverage.

The driving record will typically include information such as driver identification details, license replacements and renewals, class changes, and address changes. Additionally, it will show any driver education courses completed, as well as any suspensions, revocations, or cancellations of the driving privilege. For commercial drivers, the record may also include information on medical status and convictions related to the Highway Traffic Act and Criminal Code.

It is important to note that driving records are not static and can change over time. Most convictions will remain on a driving record for at least three years, but this duration can vary depending on the severity of the violation. For example, impaired driving convictions may remain on a record for longer than three years. Completing a rehabilitation program may help remove certain convictions from a driving record.

Health and lifestyle

When it comes to health and lifestyle, underwriting questions by an auto insurance agent can vary in detail and scope, depending on the insurance company and the type of insurance being sought. Basic questions about health are common, but in some cases, more detailed health information may be requested, along with medical tests or a physical exam. Here are some examples of health and lifestyle-related questions that may be asked during the underwriting process for auto insurance:

• Do you have any pre-existing medical conditions?
• Are you currently taking any medications?
• Have you had any major illnesses or surgeries in the past?
• What is your current state of health, including weight and blood pressure?
• Do you smoke, drink alcohol, or use recreational drugs?
• How often do you exercise, and what is your overall level of physical activity?
• Do you have a history of mental health issues?
• Are there any health conditions that run in your family?

The underwriting process aims to assess the risk associated with insuring an individual. By asking these health and lifestyle questions, insurance companies can determine the likelihood of the applicant making a claim and adjust their premiums accordingly. It's important to note that applicants should always answer these questions truthfully, as providing false information could lead to future claims being denied.

Insurance history

When applying for auto insurance, the applicant will be asked for their insurance history. This is because insurance companies rely on underwriting for every policy they issue. Underwriting is the process used to determine whether someone is eligible to receive a financial product like insurance. It involves gathering information about the applicant's history and characteristics to help decide whether to accept or decline the application.

The insurance history questions an applicant might be asked include:

• How long have you had continuous car insurance?
• Have you had any accidents within the past 5 years? If so, were they your fault? Were there any injuries?
• Have you had any convictions for minor or major traffic infractions in the last 7 years?
• Has your driver's license ever been suspended or revoked?

The answers to these questions are extremely important to companies who offer a large amount of financial protection in exchange for a small premium. The information provided by the applicant is used by the underwriter to assess the risk of the applicant filing a claim and determine the price of the policy.

Frequently asked questions