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Ways Auto Insurance Companies Find Out About A Driving Record

Thursday, April 15th, 2010

When applying for auto insurance, there are always the looming questions of how and when auto insurance companies find out about a driver’s record. This is also why it is important not to budget future auto insurance expenses based upon a generic auto insurance quote generated online because such quotes may not take into account the rating system a particular company uses to calculate auto insurance premiums.

To further complicate matters, not all auto insurance companies check with the same frequency or using the same criteria. Some companies will check only the DMV (Department of Motor Vehicles) before issuing an auto insurance quote. Other companies may also evaluate the credit score of the insurance applicant. Some companies check only when issuing a new quote or making a change to an existing policy. Other companies will do random spot checks to identify recent changes to a policy holder’s driving record. However, all insurance companies will use the DMV records in the applicant’s state of residence as a baseline for issuing a quote and setting auto insurance premiums. Companies will set the estimated risk level of an applicant from determining the number of points on a driver’s record at the time an application for insurance coverage is filed. Here is where a low score really works to the applicant’s advantage – no or low points indicates low risk, and these drivers are rewarded with lower premiums.

This is why understanding how a driving record is set is equally critical to managing auto insurance premium expenses. A driving record is not unlike a set of test results except in reverse – the lower the score, the better the driver. High scores on driving records indicate high risk to insurance companies with correspondingly high auto insurance quotes soon to follow. Speeding tickets, illegal lane changes, parking violations, collisions, running red lights or stop signs, unsafe driving practices and more will be subject to increased driver record scores.

While it can seem puzzling that agents have access to a driver’s record with the DMV, the act of applying for an auto insurance quote is what gives the auto insurance company the right to gain access to the applicant’s DMV records. Auto insurance companies can also conduct an online search and approach federal agencies for these records, but the DMV is the source most often and easily accessed. The best way to apply for auto insurance quotes is to be knowledgeable about personal driving record data before beginning to gather quotes. Additionally, for high risk drivers there are also memberships available for a nominal fee that can notify a driver of changes to driving record that may increase or decrease premiums.

Top Insurance Companies to Consider for Auto Insurance in 2010

Tuesday, March 2nd, 2010

Anyone who watches television even a little must be aware of how heavily auto insurance companies advertise for your business. Obviously they must be having success running non-stop commercials, or they wouldn’t keep doing it. If you are in the market for a new motor vehicle policy, you might be tempted simply to call one of the firms that you see on TV. Usually they will be happy to give you an auto insurance quote. That’s one way to make your decision, and not necessarily a bad way, either. However, because this is such a competitive industry, there exists a wealth of data to assist the careful consumer. A little research can yield valuable insights about the top auto insurance companies. Here are several choices for your consideration in 2010.

One important factor is the overall financial strength of the company. Make sure to examine the “letter grade” awarded by an Independent Ratings firm. If you register with A.M Best, for example, you will gain instant access to their huge members-only credit rating database. Using the search function you can quickly pull up the file on any of the major auto insurance carriers. Some highlights: Travelers Auto Insurance Co., GEICO, and Progressive all receive A or A+ marks or better for financial strength rating. AAA Auto Clubs has many different franchises organized by state or region; their ratings vary from B++ to A+.

Customer service is also a critical factor for most drivers. If you focus exclusively on price, and only look at the auto insurance quotes, you may be frustrated and disappointed if you are in an accident and need to file a claim. This is where consumer advocacy groups can be helpful. Visit the websites of the Better Business Bureau (, Consumer Reports (, and Public Citizen ( for lots of independent reviews and exposes.

Finally, consider the many “Top Ten” lists that are available online. While the criteria and bias of the different websites can always be debated, it is a good place to start. Reading reviews and comments from other consumers can be very revealing. Usually the rankings are a combination of elements, like affordability, value of services, and responsiveness, in addition to price, of course. The following twenty companies seem to be highly regarded by large and varied segments of the critical press. They are listed alphabetically: AAA, AARP, Allstate, American Family, Ameriprise, Cotton States, Esurance, Farmers Insurance, Geico, GMAC Insurance, Liberty Mutual, Nationwide, OML, Progressive, Safeco, Seminole Casualty Insurance, State Farm, Travelers, 21st Century Insurance, and USAA. Somewhere in that group is a coverage plan that will fit your needs. The “top” choice will depend on you; as the saying goes, “your mileage may vary.”

Auto Insurance: Should You Go With a Well-Known or Little-Known Company?

Wednesday, July 8th, 2009

When getting auto insurance quotes online, you’re often given information for both large and small companies, companies that you know, and companies that you’ve never heard of before. It can be unnerving to get an auto insurance policy for some of those lesser known companies, but they can be a good resource if you want lower cost insurance and you’re confident in their operations. There are advantages to doing business with both prominent and smaller auto insurance companies.

Reputable auto insurance companies offer many benefits to the driver looking to switch auto insurance companies. First, they’re generally rather stable in their business, so you know they won’t be disappearing. In addition, prominent auto insurance companies generally offer policies that insure other products as well, such as homes, apartments, and recreational vehicles. Because you can use the well-known auto insurance companies for multiple insurances, you may be able to get a discount. Of course, with these companies, you also have a good idea of where to go if you have a problem.

Getting an auto insurance quote from a lesser known company can be intimidating because their names are not advertised daily. Some people choose to go with smaller companies, however, because they’re local, dealing with just one area or state. Some feel that by doing business with these companies, they are supporting local businesses. Others may think that these companies know them better, and are able to recommend better policies. With smaller companies, customers may not have long hold times when they call. They may also be able to take advantage of lower introductory rates, if a company is new.

There is one major concern when it comes to doing business with a little-known company, however. That concern is that the business is somehow operating in an illegitimate or unethical manner. Some scammers pretend to be smaller businesses, only to end up taking your money in the long run. Other little-known businesses are not operated in a responsible manner, and they end up failing, meaning that your policies are not upheld.

Of course, there are downfalls to going with reputable businesses as well. These companies have long lists of customers and it might be hard to get individualized attention. You may experience long wait times on the phone, and it could be difficult to get answers to your questions.

When it comes to getting auto insurance quotes online, the best word of warning is to be prepared. Whether you get a quote from a prominent or little-known business, you need to do your research. Talk to the company, look up reviews online, and converse with current customers. By doing this, you will cover all your bases and be on your way to reliable auto insurance.

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