How Aspects Of Your Insurance History Affect Your Current Coverage
Insurance companies evaluate your insurance history before selling you coverage. The evaluation is critical because companies use past statistics to predict future behavior. Below are specifics of your insurance company that may affect your current application.
Coverage Existence
Your past coverage serves several purposes. For example, it confirms to the insurance company that other carriers evaluated your risks and considered you worthy of insurance. Secondly, it signifies that you are a responsible person who felt it necessary to buy insurance coverage. On the other hand, a lack of prior insurance casts you as a high-risk client.
For the above reasons, you should get auto insurance as soon as you can do so legally. You don't have to buy standalone coverage; get your parents or guardian to include you in their policy.
Coverage Gap
Once you get insurance coverage, do your best to maintain it. A coverage gap is a cause for alarm on multiple levels. Who knows whether you drove without coverage sometime during the gap? Who can tell the real reason for the gap? Maintain at least minimal liability coverage even if you don't own a car.
Coverage Duration
A lengthy insurance history strengthens your insurance application. For example, a decade of uninterrupted insurance coverage is better than one year. The duration of insurance history is one reason experienced drivers pay lower insurance rates than new drivers. If you have successfully maintained coverage for a long time, you will likely continue to do so.
Insurance Claims
Having few or no insurance claims in your history also helps. Multiple insurance claims, especially in the recent past or within a short period, portray you as a high-risk driver. A clean claim history proves you will not cost the insurance company much money to cover. You should especially be worried about at-fault insurance claims.
Coverage Denial or Cancellation
Coverage denial means you tried to buy or renew insurance coverage, but the insurance company declined to sell you coverage. Coverage cancellation occurs when you already have coverage, but something forces the company to drop you. A lack of cancellation and denial in your coverage history means you have always been worthy of insurance coverage.
Insurance Carrier
Lastly, the nature of the insurance companies you have dealt with affects your risk designation. Some insurance companies specialize in high-risk drivers, such as those with DUI (driving under the influence) convictions. You will have a strong insurance application if you avoid such companies.
