What Information Does an Auto Insurance Company Need?

The most important information needed to rate an auto insurance policy is driver information. You will be asked to provide the names, birth dates, occupations and drivers license numbers for each person that will be insured under this policy. You will also be asked to provide the names and birth dates of children residing in your household. Why do insurance companies need this information? Because minor children, normally those closest to legal driving age, may then be officially excluded from coverage under your policy. This exclusion protects the insurance company in the event that an unlicensed minor should take a car and get in a wreck or do damage to the vehicle. Once a child is old enough to obtain a driver permit, they should be added to the policy, in order to maintain proper coverage on your vehicles and that driver.

In addition to personal information, auto insurers need to know about each person's driving history. When you provide your drivers license number, this allows the insurer to access your Motor Vehicle Report (MVR), through databases such as ChoicePoint. This report reveals any traffic violations (from the most minor to the most serious), date of violation, and number of points that were added to a license as a result. Each insurance company has its own guidelines for determining whether drivers are insurable. Drivers with DUI charges, at fault accidents, or reckless operation violations will be charged a much higher rate for premium and may be excluded altogether from a normal auto insurance policy. These drivers then have to search for insurance from high-risk insurance companies at much steeper rates.

Each car to be covered under an auto insurance policy will need to be listed. You will be asked to provide the make, model, and VIN (Vehicle Identification Number) for each car. You can find the VIN number on your car's title, registration paperwork, and on the vehicle itself. The VIN plate is located right below the windshield, on the driver side, where the dashboard and windshield meet. This information helps the auto insurance company determine the types of risks that may be involved. If you car has extra safety features such as front, passenger and side air bags, anti-lock brakes and anti-theft systems, discounts will be applied. If you drive a sports car with the potential for reaching high speeds, your rates may be higher because of the potential for increased traffic violations.

When completing your auto insurance application, you will be asked to provide information on current and past insurance policies that you have held. This information is used to obtain loss histories from your past insurers, which provides the insurance company another way to determine how accident prone you might be.

Credit reports are used to determine what type of paying customer you will be. If you have a poor to fair score, the insurance companies believe that they will have to expend more resources in order to collect premium from you. This, in turn, causes your rates to increase.