11 questions insurance companies ask and why

cover • February 29, 2020

Do you find auto insurance confusing? It’s not surprising since a lot of people do.

In a survey done by The Zebra, only 21 percent of survey respondents would pass a test when it comes to knowing what insurance companies use to determine rates.

And not knowing the ins and outs of your policy could be costing you money. Understanding the quirks of car insurance can help you save on it.

Insurance is shrouded in a lot of mystery, hence why it’s confusing and it’s common to not fully understand what coverages you have or don’t have.

But we’ll explain why insurance companies (including Cover) ask certain questions during the quoting process to get you an accurate car insurance rate.

Here’s a brief overview of the Cover app and what you’ll see when you get an auto quote.

First up: Your driver’s license

Insurance companies use your driver’s license to find out about your driving record and claims history. They get this information through two reports: MVR and CLUE.

Through these reports, insurance companies can find out if there are any suspensions or infractions on your driving record. They can also view any claims that have been filed under your name. All these factors can have an effect on your rate.

A clean driving record will only benefit you in getting a lower rate. Getting into accidents (no matter how minor) and filing claims is seen as reckless behavior and will cause your rate to rise.

Our entire quoting process takes just under five minutes. But to save you even more time, you can scan your driver’s license in the app. From there, it’ll autofill your basic information as well as other details for later questions.

Your ZIP code matters more than you think

Where you live and where your car is kept impacts your car insurance rate.

Insurers take this into account because your area might have a high crime rate in general or auto theft specifically. Or maybe your neighborhood has a ton of people. More people and more cars means there’s a higher potential for an accident to happen. It could even be that your area has seen a spike in the number of claims filed recently.

If all these things are present, the insurance companies will take this into account to anticipate you filing a claim. You will see a higher rate.

Are you a happy homeowner? Let insurance companies know

Indicating that you’re a homeowner is beneficial to you.

Some insurance companies give a discount on your auto policy because you own your home. And you could also potentially bundle your home and auto policy under the same company to get a multi-policy discount.

How long have you been driving?

Maybe you got your license as soon as you could and maybe you waited until a little later.

Insurance companies want to know how long you’ve been driving to get a gauge on your skills. The more driving experience you have under your belt, the lower your premium will be.

As you become a seasoned driver, you’re more exposed to different scenarios and you’ll be able to react quickly and accordingly to a situation to avoid accidents.

Your education and occupation could give you a discount

Staying in school will give you a lower premium. And certain occupations will result in a discount, such as if you were in the military.

Maintaining insurance is key

Having continuous coverage means that you’re a lower risk than those who have a lapse in coverage.

Sometimes, a lapse in coverage can raise your premium by 12 percent. And sometimes insurance companies choose not to insure you because of a lapse in coverage.

Your relationship status isn’t just to be shared on social media

The research is weak at best, but insurance companies still tend to rate drivers based on their relationship status.

On average, married couples have 12 percent lower premiums. Widowed and divorced drivers see higher rates too.

You drive, but exactly how much?

In the States, the average annual mileage for a driver in the States is 12,000. If you drive anywhere between 0 and 7,500 miles a year, you’re considered a low-mileage driver and you’ll typically pay less for insurance.

The less time you spend on the road driving, the lower the chance you’ll be in an accident and have to file a claim.

How protected do you want to be?

Liability insurance covers the costs of injuries and damage you could do to other people and their property when driving.

Every state has laws around how much liability insurance is required for you to legally drive. But it’s important to strike a balance between making sure you have enough coverage and how much you can afford.

With Cover, we have preset plans you can choose from based on what you’re comfortable with.

Protection for your car?

Liability won’t protect your own car. So if you want to add comprehensive and collision insurance to cover the costs of any damage to your car, you should consider adding them to your policy.

Comprehensive insurance reimburses you for damage to your car that wasn’t caused by a collision of any sort. Collision insurance covers the cost of replacing or repairing your car if you’re involved in an accident.

Adding this will increase how much you pay, but it’s worth it for peace of mind.

How much are you willing to pay on your own?

There’s a direct relationship between paying lower premiums and having a policy with a higher deductible. This makes it a straightforward route to lower auto insurance costs.

Remember that if you do get in an accident, the money you might have saved from lower premiums would quickly be offset by the higher car insurance deductible since you will need to pay this portion yourself.

Imagine filling out all that information again and again for each insurance company you want to get a quote from!

With Cover, we’ll search the market of over 30 insurers to match you with the coverage you want at a rate that won’t break the bank.

Once you receive your quote, you’ll get a text message from one of our advisors. You can review the quote in the app and ask any questions over SMS. It’s that easy to get coverage.

Cover
will get you an auto quote in as little as five minutes.
All you have to do is answer a few short questions.