When you go to apply for an auto insurance policy, you might think that information is passed back and forth between different auto insurance companies about your driving record or claims history. However, this is simply not the case.
The information that auto insurance companies use to determine the price of your premium generally comes from specialty consumer reporting agencies that sell information about your driving record and other factors to any auto insurance company that requests it.
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Providing Your Personal Information
In evaluating a new driver for an auto insurance policy, auto insurance companies take a variety of factors into account. The most important ones are your driving record, history of filing claims, credit report and your number of years of driving experience.
Auto insurance companies are also likely to consider the zip code that you live in, the value of your vehicle and the same factors for every other driver that lives in your household unless you specifically exclude that driver from your auto insurance policy.
When filling out information to receive a quote from an auto insurance company, you must be honest and accurate in your application.
The information you provide may be verified by the auto insurance company, and your failure to submit accurate information could be grounds for the auto insurance company not to extend you a policy or cancel your policy later on.
In general, the auto insurance company or agent will ask you questions about the make and model of the vehicles under your policy and the types and amounts of auto insurance coverages that you are interested in.
You will also be asked to provide information on the other drivers that live in your home. For your each of your vehicles, you should have the Vehicle Identification Numbers (VIN) ready.
You may also want to consider what your existing insurance policies are for your home and life insurance in the event that the auto insurance company offers you a discount for bundling multiple insurance policies.
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Information from Specialty Consumer Reporting Agencies
When you apply for an auto insurance quote from a new company, the company that you request a new quote from does not call up your current insurer to find out about your driving record and claims history.
Rather, the new auto insurance company likely uses information provided by several specialty consumer reporting agencies to evaluate your risk level as an insured driver.
Some of the information collected by the major specialty consumer reporting agencies includes car insurance claims, homeowners and renters insurance claims, employment history, opening new bank accounts and other financial information.
Getting a Copy of the Individual Reports on You from Credit Reporting Agencies
If you are interested in finding out what information about you is included in these reports from the major specialty consumer reporting agencies, you can request a copy of the report that they have on you in their files.
There is no universal report, so you would need to request a report from each one of the major specialty consumer reporting agencies. The Consumer Financial Protection Bureau offers a list of the major specialty consumer reporting agencies in the event that you would like to request a report.
If you notice any incorrect information in the consumer report about you, you should contact that reporting agency directly about your discrepancy with the report.
Be prepared to supply documentation to support your claim. You may want to take this step before applying for auto insurance just to make sure that the information in consumer reports about you is accurate.
Keep in mind that you will often not get a notice about a decision not to extend you an offer for auto insurance based on negative information in a consumer report about you until after the actual denial.
This is why it is a good practice to periodically review the information about you in a report and make sure that it is accurate. It is much harder to get an auto insurance company to reconsider updated information on you after you have already been denied for a policy.
When you request a copy of your individual report from a specialty credit reporting agency, you may be required to pay a small fee. The maximum fee is currently $12.
However, if an adverse action has been taken against you, such as a denial of your auto insurance application, then you may be entitled to get a copy of your report for free. Most credit reporting agencies will provide you will a free copy regardless every 12 months.
If you run into any problems in getting a specialty consumer reporting agency to honor your request for a copy of your individual report, you can contact the Consumer Financial Protection Bureau to lodge a complaint against the specific agency.
They can also answer your questions about updating or changing inaccurate information that is listed for you in your consumer report.
Recap on Information Sharing Among Auto Insurance Companies
There is certain information about your driving record and history of making insurance claims that auto insurance companies can request from specialty consumer reporting agencies in order to quote you a rate for an auto insurance policy.
This information is not shared directly between auto insurance companies.
But the same basic information is used by virtually all auto insurance companies in quoting your rate.
You should get a copy of the reports on you every so often just to verify that all of the information about you is accurate.
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