They Rank You
We all know that insurance companies set your rate based on your age, sex and the area you live in. Your accidents and violations each add a surcharge to your policy, too. However, you also get rated according to your tier. Tiers are based on many factors, including your length of time with the company, your payment history and your credit history. The highest tiers get the best rates and the lower ones get higher rates. Depending on the company, it’s possible that someone with several violations on their record in the highest tier may still pay less than someone with a clean record in the lowers tier.
You know that your auto insurance company will look into events of claim but did you know that they investigate you throughout the course of your policy as well? It’s called the underwriting process and your car insurance company has an entire department dedicated to it. As your policy renews and at regular intervals throughout the year, the underwriters assigned to your policy run DMV reports on your license, your household and your car. They can also run policy reports on you, too. They even have access to claims records from other insurance companies to find information you may not have volunteered. For example, if you were a passenger in an accident, you may not have disclosed that to the company when you started your policy. The insurance company’s underwriting department can find that out by running your information and change the rate on your policy based on it.
Depending on the state you live in and the company you’re insured with, your auto insurance policy usually lasts six months or a year. If you decide you don’t to be with that company anymore, you can leave at any time. You don’t have to wait until the policy is over. Get your new policy first and then cancel your old one. They have to backdate it to the date you became insured with someone else and return any money you paid to cover yourself for that time. Be prepared to show proof of your new policy if you request backdating, though.