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Understanding Insurance Company Underwriting and Questions

Managing automobile insurance premiums, rates, & costs state-to-state is a difficult job for insurance companies. It’s also a difficult situation for many American’s shopping for affordable coverage options.

We have gathered some of the many “Insurance company underwriting questions” we frequently see and also many consumers frequently asked questions about insurance policy and coverage-related questions for homeowners and auto.

Premier Insurance Policy Underwriting Process for Home, Auto, and Flood Insurance Coverage

We’re transparent unlike the rest of the “insurance agency industry” which won’t fully explain online how insurance works. They like to keep consumers in the dark so they can “land a sale”. We’re not here to sell you anything, we’re only here to help. If you want a knowledgeable independent insurance agency that offers the best price and coverage, you’ll decide to be a customer.

If another insurance agency or insurance company is a better fit for your situation, that’s perfectly fine. We’ll shake hands and part as friends.

So how does insurance underwriting work? What questions about car insurance are asked? What factors affect the cost of insurance? What questions should I ask an insurance company? What makes insurance more expensive? 

 

How does insurance underwriting work?

The insurance underwriting works differently for different states, different companies, and different insurance products. It’s no wonder consumers lack education when it comes to insurance-related matters. That’s why we work hard to help educate consumers and talk about insurance in a simple, easy-to-follow way that helps you make sense of the confusion around insurance products and personal situations.

“Insurance underwriters are professionals who evaluate and analyze the risks involved in insuring people and assets. Insurance underwriters establish pricing for accepted insurable risks. The term underwriting means receiving remuneration for the willingness to pay a potential risk”. Insurance Underwriter Definition – Learn more about “how insurance underwriting works” by visiting this article on Investopedia.

Premier Shield “Vehicle Insurance Underwriting Process”

Insurance rates can only be “low and accurate” consistently if we have accurate data and inputs into the policy. We don’t want you to have underwriting issues after we issue the auto or homeowners insurance policy, that’s why we work hard to be as thorough as possible when completing the insurance underwriting process.

Top Insurance Company Underwriting Questions for Auto

Companies need a lot of personal information to provide you with an accurate quote. Below is a full list of questions you can expect. If your agent doesn’t ask these questions it’s because we use intuitive software that pulls information directly from the RMV database through the insurance company software.

Auto Insurance Due Diligence Underwriting Questions

Be prepared using our Premier Shield Auto Insurance resources to help you know what to expect when getting quotes for your home, auto, or flood insurance policies.

Insurance Disclosure

Insurance Disclosures & FCRA Scripting – For telephone auto insurance quotes, “If in-person, print and provide to the consumer: Like most insurance companies, Plymouth Rock, Safeco, Metlife, Bristol West, and Progressive uses information from you and other sources, such as your driving, claims, and credit histories, to calculate an accurate price for your insurance. New or updated information may be used to calculate your renewal premium.

In each of their “Privacy Policies”, auto insurance companies explain how they “discloses and protects your personal information” and how you “may find and correct it”. As a local insurance agent, Premier Shield Insurance agents can provide a copy at your request.”

Personal Information about You & Your Driving Situation

  1. Provide contact information phone number or email – While it’s not required for us to give you a quote. Our agency requires it because if you’re not willing to communicate with us, you’re not serious about getting an insurance policy. This is not a common problem in Massachusetts. It is however something you see in other states like Ohio, Texas, Virginia, South Carolina, and Connecticut.
  2. What state do you live in?
  3. What is the effective date of the auto policy? For new customers switching companies, look at the “Current Policy Term Expiration Date” shopping in advanced 8 days or more for your new auto policy can save you up to 15%. Waiting till the last minute or requesting “same day auto insurance coverage” will lead to higher annual premiums, prices and rates.
  4. Is this a commercial auto or personal auto insurance policy?
  5. Who is the primary named insured? For most auto insurance situations,  policies are “one car and one driver”. Some situations that including vehicle financing may involve a spouse, parent, boyfriend/girlfriend, or another 3rd party that may complicate the policy.
  6. Is there a 2ndary named insured? Are you financing the car in someone else’s name? All leases and financed vehicles must include all parties involved.
  7. What is your Current Mailing Address?
  8. How long has the insured lived at their current address? Potential Answers: Less than 2 months, Between 2 months and 1 year, over 1 year.
  9. Who are lives in the same household as you? “It is required that you must list all licensed drivers living in your household who are related to you by blood, marriage, or adoption, including drivers already covered by their own automobile insurance policies. To avoid any potential claim complications, you should list any person who may occasionally drive your car.’ – Brian Plain
  10. What is the vehicle Year?
  11. What is the vehicle Make?
  12. What is the vehicle Model?
  13. What is the VIN number or the car’s vehicle identification number?
  14. What is the vehicle’s body style?
  15. What is the vehicle’s garaging zip code? Many people have different mailing addresses than where they live. Please tell your agent the accurate location zip code of where the vehicle will be most often.
  16. How long have you owned the vehicle? Customers who own cars for over 1 year are eligible for discounts with some insurance companies. Customers that have 5 or more years with the same vehicle are typically eligible for the lowest car insurance price if they’re claims-free & pay-in-full for their 6-month or 12-month insurance policy.
  17. What is the primary use of the vehicle? Pleasure, Commute, Business Use, or Lyft/Uber/Uber Eats
  18. How many miles do you drive per year? In the state of Massachusetts, the mileage is calculated by using your year-over-year change or delta on your vehicle inspection. This is one reason it’s important to your inspection done ASAP. Well, at least when the entire Massachusetts vehicle registration system isn’t getting hacked.
  19. With the exception of #RideShare, is the vehicle used for delivery? If your doing delivery it will most likely require commercial plates & registration, a commercial auto policy, and higher coverage limits due to the policy type. Make sure you tell your agent if you are engaging in business-related activities with your car or truck.
  20. Does your car, truck, or SUV have “automatic emergency braking” that is factory installed? What is Automatic emergency braking? AEB or automatic emergency breaking basically assesses the risk of a collision. It looks at collision risk with an obstacle in front which helps prevent or reduce the damage due to impact. The system automatically applies the brakes which is excellent to help consumers reduce or prevent the risk of an accident or collision. This discount only applies to some car insurance company policies, like Progressive. The automatic braking is required to factory-installed to meet underwriting eligibility guidelines. If your SUV, truck, or car has “adaptive cruise control”, that does not qualify for the “automatic emergency braking discount“. While these safety features are nice, insurance companies have been reluctant to offer discounts overall. Learn more by reading Data-Deprived Auto Insurers Cautious About Discounts for Advanced Safety Features by the Insurance Journal.
  21. Is the vehicle financed or is there a ‘lienholder’? Our agent will ask you “is the vehicle financed” or “is there a loan on the car“? Financed cars required “full coverage auto insurance”. A lienholder is a person or organization that loaned you the money to buy a car or truck. In a financed vehicle situation, it basically means “you don’t own the car”. The finance company owns the car till you pay off your car note. The company behind the loan origination and mandate or require you to carry either a $500 or a $1,000 comprehensive and/or collision deductible for your car insurance coverage. This leads to higher rates compared to cheap liability-only car insurance which is generally 50% cheaper per year.
  22. Is this a leased vehicle? Many young and or bad drivers make poor choices when it comes to acquiring a vehicle. A leased car or truck is a vehicle you don’t own. You are required to carry “much high coverage limits on leased vehicles”. This includes “optional bodily injury limits of $100,000 per persona and $300,000 per accident” as well as “$100,000 property damage” coverage is also required to protect the financial interest of the leasing company.
  23. Should we rate the other household members on the car insurance policy? Since the law says “all household members of driving age (even if they do not drive the vehicles) must be listed on the policy, you can choose how to proceed with “rating each driver”. This means, depending on the automobile insurance company, you can “rate a driver”, “defer a driver”, or “exclude a driver” depending on the price and situation.
  24. Are there any “non-rated drivers” on the policy? With most companies, “A Non-Rated drivers must be a ‘Permit Driver’ where the ‘Relationship to Named Insured is Child‘ and Marital Status is either ‘Single or Married'”. If your state allows “Excluded or List Only drivers” please tell your Premier Shield agent the reason the driver will not use or operate any of the covered autos on the policy. To be listed as Military Deployment the driver must be ‘Out of the country’ including all territories and possessions of the United States of America. CUSTOMER NOTE: You are required to sign forms and/or Provide Proof may for certain driver status situations.
  25. What is the Auto Insurance Driver’s Age First Licensed? The date you first got your driver’s license will have a major impact on price. You could be 50 years old, just get your license and they’ll charge you the same rates they’ll charge an 18-year-old in the same situation. When you’re a new driver, you are considered high-risk “regardless of your age”.
  26. Do you need help with a State or Financial Responsibility Filing, like an SR22 or FR44? Some states like Ohio, Texas, New Hampshire, and many others require some car insurance policyholders to file an SR-22 or FR-44 with the insurance company. It used to be a real pain for consumers but we make the process as simple as possible filing on your behalf electronically in all states we provide coverage (except NH which is expediated through the mail).
  27. Who is the principal operator of the vehicle? If it’s a 55-year-old man the rate will be different than an 18-year-old male, be honest about who is using the vehicle. Insurance companies will “not pay on a claim” if there is a material breach of contract and they find out you were dishonest about the primary driver. We have seen this happen to parents “trying to get one over on the insurance companies”. Insurance fraud is a real problem, if you can’t afford to have a young driver on the policy exclude them or have them get their own policy, it’s that simple.
  28. Do you or any household members rated on the policy have an accident? If you have a recent accident or claim for hitting something, expect a 5-15% jump in your rates in a normal state for a normal driver. If you’re in a high-risk city like Boston/Framingham/Worcester, San Antonio/Austin/Houston TX, Cleveland/Columbus/Cincinnati OH you can expect rates to go up 20-50%.
  29. Do you or any household members rated on the policy have any tickets or moving violations? Tickets for speeding along with moving violations will stay on your driving record for 5-6 years depending on the state. If you have any tickets make sure you keep track of the dates and what the ticket was for to make sure your rate is final and accurate.
  30. Does the “primary named insured” or other drivers listed on the policy have any comprehensive claims or losses? In 2021, insurance companies are cracking down “Big Time” when it comes to comprehensive “claims abusers”. You know who you are. You have 3 or more different claims that span a 5 year period. You like to and enjoy filing “free glass insurance claims” because “that’s what insurance is for” am I right? Insurance is also something that requires discipline and responsibility and if you act otherwise you will pay dearly over the next 3 to 5 years. Limit your comprehensive claim totals by paying out of pocket for any claim that is $1,000 or less.
  31. Do you currently have auto insurance“? When we say “Currently have Auto Insurance” this can be defined as “vehicle liability insurance coverage for at least 6 months with no more than a 31-day lapse in coverage” – Brian Plain
  32. If you do have “Prior Auto Insurance Coverage” how long have you had the policy? What is the “Total nAre you a loyal car insurance customer or do you switch policies every 6 or 12 months? The rate you pay for car insurance will be strongly weighed by how long you have had your current automobile insurance policy. The customers who have had their auto insurance company for “8 years or more” are overpaying by 15-45% depending on who their insurance company is. Other policyholders who have had their auto insurance for “5 years or more” also typically eligible for “the lowest rates” with most companies, especially if they are homeowners and/or bundle property insurance with auto insurance.
  33. Have you ever had your auto insurance coverage and policy canceled for non-payment of insurance premium? If so, How many times have you or other household members been canceled for non-payment? Billing with insurance is “not a joke” they take this stuff seriously and if you care about your money and how much you pay for car insurance you will too. Car insurance should be one of the top 3 expenses you pay along with housing and food. Transportation is your means to making money, don’t jeopardize that.
  34. Have you filed a PIP claim in the past 6 years? If so “How many PIP or ‘personal injury protection claims have been made within the last three years on insurance policies? Were any of the drivers listed on this quote were insured? PIP claims will get you an auto policy declination or have your policy coverage ‘outright denied’ with many insurance companies. Drive safe and avoid having PIP claims if you can help it.

Top Insurance Company Underwriting Questions for Home

  • Is this a new home purchase?
  • If it is a new home purchase, what is the estimated closing date for the property?
  • Have you been canceled, declined, or non-renewed for a home insurance policy within the past 5 years?
  • Do you have any property or homeowners insurance claims?
  • Do you own a dog?
  • Do you have a trampoline?
  • Is there a swimming pool?
  • Does the swimming pool have a fence around it?
  • Do you have a diving board?
  • Is there a trampoline?
  • How close to the coast is your house?
  • Does the house have a flat or partially flat roof?
  • When was the home built?
  • How many square feet is the home?
  • What type of foundation does the home have?
  • What type of roof does your home have?
  • Are there solar panels?
  • How is your credit and insurance score impacting your current price?

Top Auto Insurance Consumer Questions

Top Home Insurance Consumer Questions

  1. What questions do home insurance companies ask?
  2. What should I look for when buying homeowners insurance?
  3. Which home insurance is best for 2021?
  4. Which home insurance is the best?

Additional Resources

Learn more about buying insurance in Consumer Reports’ online “Auto and Car Insurance Buying Guide
(www.consumerreports.org/cro/car-insurance/buying-guide.htm).