How far back do auto insurance companies look?
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UPDATED: Oct 19, 2021
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- Car insurance is required by law in almost every state
- Car insurance companies consider many factors when determining your auto insurance policy premium including your age, gender, location, driving record, claims history, and even your credit-worthiness
- The lookback period for your credit report is around seven to ten years, depending on what type of information it is
- The lookback period for your claims and driving history is usually around two to three years, depending on the specific policies and practices of the car insurance carrier
If you have a blemished driving record, you may be worried about how it will affect your auto insurance premiums and how long it will stay on your record. An insurance company does tend to take your driving history as well as your credit score into account when setting you up with a policy. High-risk drivers with any sort of violation on their record will end up paying their insurer more than someone with a clean driving record. This means that a single speeding ticket might hike up your monthly premium. If you’re not already practicing safe driving habits, consider doing so, if for no other reason to save money on your average car insurance rates.
While you can’t go back and change your past driving infractions, you can help keep your premiums low by using an auto insurance price comparison tool. These tools let drivers compare several policies and premiums all at once and will help you answer the question of how long do car insurance policies last.
It’s a great option to have, especially if you’ve become overwhelmed with how many auto insurance companies there are. Begin comparing right now! Enter your zip code above!
Is there such a thing as legally required car insurance?
No matter what is on your driving record or your claims history, be it multiple traffic violations or a single act of reckless driving, drivers in nearly every state are legally required to have car insurance. Do all states require auto insurance? No, but the vast majority do.
Your current insurer no doubt has a minimum amount of coverage required in order for you to be a customer, too. This is to prevent you from spiraling into debt should you get into an accident. On the flip side of the same coin, they may also have coverage limits in place, to ensure that you’re not going to cost them too much money.
Even if there are factors that you cannot control that drive your auto insurance premiums up, you are still mandated to carry the minimum amounts of insurance coverage in your state.
Even if you drive the exact same vehicle as someone else, the price you both pay for your auto policy will be different. Car insurance companies consider many different factors when it comes to putting a price tag on your auto insurance policy. The types of coverage you’ve included in your policy will also determine what you pay, though that could be said across the board. Mainly, the varying factors that companies tend to have differing opinions of include whether or not you have poor credit, if you have a particularly bad driving record, and if you’ve ever had a lapse in coverage before.
The basis of these factors is how much of a risk you are to the carrier. If you are presumed to be a lower risk based on certain factors, you will pay a lower premium. On the other hand, if the carrier deems you to be a higher risk driver, your premium will also be higher to match. This is why it’s imperative to keep a clean driving record for as long as you can. One violation could throw off the scope of what you end up paying to insure your vehicle.
While car insurance companies don’t give out their formulas for determining premiums, we do know of several factors of determination for most auto insurance companies. These include:
- Location – The area where you live may be more prone to hail, car thefts, vandalism, or even accidents. Additionally, there could be a high rate of lawsuits after car accidents in your area. If you live in an at-risk area, your premium will likely be higher.
- Parking – The safest place to park your car is in an attached garage. If you park your car in a community parking lot, parking garage, on the street, or in a car port, it is more likely to be damaged by weather, stolen, or vandalized.
- Age – In general, younger drivers are less experienced and more likely to take risks, which makes them more likely to get into an accident or get a ticket. Due to this, older drivers usually see lower premiums than younger ones.
- Gender – On a whole, men and women drive differently. Men tend to take more risks and are statistically more likely to get DUIs. This mean’s that women usually pay lower premiums than men.
- Credit – What many drivers may not expect to factor into the cost of the auto policy premium but does, is their credit history and score. Drivers with better and excellent credit will have the luxury of lower premiums.
- Driving and claims history – This may be the most obvious factor that car insurance companies examine when determining the price of your policy. Auto insurance carriers work on the premise that past behaviors are good predictors of future behaviors.
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How far back do auto insurance companies look?
In states where it is legal, insurance companies will look at your full credit report. This includes how much credit you have and are currently using, any delinquent or collections accounts, payment history, and your score.
Generally, negative information on your credit report such as an account in collections or a late payment, will remain for about seven years.
However, positive information on your credit report, such as paying off your car, will be visible for ten years. When it comes to factoring your credit history into your car insurance premium, car insurance companies have a look back period of about seven to ten years. Anything before this period of time is usually discarded.
How often do car insurance companies check your driving record?
While it can take several years for negative information to come off of your credit report and to build a better, clean record, the good news is that car insurance carriers do not have as long as a look back period when it comes to your driving record and claims history.
Depending on when you last had a ticket, a car accident, or submitted a claim to your car insurance company, you may not need to worry about it impacting your premium negatively.
Car insurance companies have different policies when it comes to how far they look back when it comes to past driving history and claims.
So how far back do insurance companies look for claims? In general, the look back period is about two to three years. Keep in mind that some driving infractions and criminal activity can remain on your record for five to ten years and claims history can remain on a claims report for up to seven years.
If you need a better premium due to some past driving or credit mistakes, it’s time to try an auto insurance price comparison tool. Using online tools can help to give you a better customer experience. Even if you have less than perfect credit or a blemished driving record, these tools can help you find a premium you can afford. Insurance costs should be factored into your budget, simply because it’s a necessity. Not getting the cheapest insurance rate on the market shouldn’t prevent you from getting coverage.