When you compare car insurance quotes, you have to share information with auto insurers in order to get accurate rates. While you can often get quotes with minimal personal information, the more detail you provide, the more accurate your quotes will be.
So what do insurance companies ask when preparing car insurance quotes?
Most of the information is basic, but you may not know it all by heart and knowing what to expect can help you prepare.
Read on for 16 questions an auto insurer will probably ask, and why they need to know.
- Insurance companies ask a lot of questions when preparing a quote to make sure rates are accurate.
- Basic information about all of the drivers and vehicles in the household is required to get a quote.
- You'll need to know what type of coverage, including types, limits, and deductibles, you want to get car insurance quotes.
- 1. What's your ZIP code?
- 2. What is the year, make and model of your car?
- 3. How many drivers are in your household?
- 4. What is the primary use of your vehicle?
- 5. How many miles do you drive each year?
- 6. Does your car have an anti-theft device?
- 7. Is there a loan or a lease on the car?
- 8. What is the status of your license?
- 9. What is your marital status?
- 11. What is the highest level of education you’ve completed?
- 12. Do you or any other drivers in the household have any violations on your record?
- 13. Do you or any other drivers in the household have any accidents or claims on your record?
- 14. Do you own or rent your home?
- 15. Are you currently insured?
- 16. What coverages do you want on your policy?
- Always be honest when shopping for car insurance.
1. What's your ZIP code?
This question typically kicks off a car insurance quote. It's the first thing any insurance company needs to know.
Why they ask: Not all insurance companies serve all state or even all ZIP codes in a state, so it immediately determines what companies can insure you. Furthermore, rates differ based on ZIP code.
If you live in a metropolitan area, you'll normally pay more than someone who lives in a suburban or country setting. Insurers look at the number and severity of auto insurance claims in an area to calculate base rates. Cities typically have more traffic congestion and crime, which means more claims.
2. What is the year, make and model of your car?
You will need to know the vehicle's year, make and model, as well as trim level. You don't need the vehicle identification number (VIN) to get quotes, but it does make things easier, and it's required to buy the policy,
Why they ask: An insurer takes into account a vehicle’s claims history and repair costs when determining rates because some vehicles are a higher risk than others. The value of your car also matters. You can expect a luxury SUV to cost more to insure than an economy car because it would cost a lot more to replace.
This part isn’t about you – it’s about the claims filed by everyone who drives the same kind of car.
3. How many drivers are in your household?
Give the number and then be prepared to list all household licensed drivers.
Why they ask: Insurers assume all licensed household members will drive the insured vehicles, thus it requires you to share who these individuals are so they – and their driving records -- can be taken into account when rates are calculated.
4. What is the primary use of your vehicle?
Be ready to say how you use your vehicle, such as:
- Commuting to and from work or school
- Pleasure
- Business
- Farm
Why they ask: If you're driving your car many miles every day for business, that is a different type of risk for an insurer than a car that sits in a parking lot at work or a pleasure car that sits in the garage a majority of the time.
5. How many miles do you drive each year?
You should have a fair estimate of how many miles you put on your vehicle annually. If you aren’t certain, try to calculate your weekly mileage and multiply by 52.
Why they ask: The more time you spend on the road each year, the more risk you present to an insurer. “Average mileage” varies, but with most insurers it’s 10,000 to 12,000 annually. Discounts are often offered if you drive fewer miles, especially less than 7,000 or so. Your rates will be higher if you drive many more miles than the average driver.
6. Does your car have an anti-theft device?
Knowing that you have an anti-theft device isn’t enough; you will need to know what type it is and if it’s active (you must arm it) or passive (arms automatically). Check out your vehicle’s manual if you’re uncertain.
Why they ask: You can get a discount on comprehensive coverage for having an anti-theft device. How much of a discount depends on what the device does. If the device can help track your car if it’s stolen, it’s worth a bigger discount than a simple audible alarm. Devices that work without you having to activate them – “passive” devices such as an engine immobilizer – get you a bigger discount than “active” devices that require you to install a steering wheel lock or arm an alarm whenever you leave the car.
7. Is there a loan or a lease on the car?
Your insurance company needs to know you own your car outright or if it's financed or leased.
Why they ask: It doesn’t make a difference in your rates, but it can determine what coverages and limits you’ll be offered.
Insurers will require you buy collision and comprehensive coverage if you have financed or leased because they know lenders demand these coverages. If you leased, then many insurers will only offer you higher liability limits of 100/300/50 (or more) because that is what leasing companies require.
If you own your car outright, you can buy only the legally required coverages if you want to. If you have a loan or lease, the insurance company will need to list the company on the policy and provide them with proof of insurance.
8. What is the status of your license?
There are a few different types of licenses and statuses, such as:
- Permit
- Valid
- Suspended
- Revoked
- Expired
- Foreign license
The insurance company needs to know the status for all drivers.
Why they ask: To get insurance you need to have a valid license. If you have a permit, suspended or revoked license, it will be harder to obtain a policy because not all insurers offer policies to new drivers (permit holders) or those whose current license status doesn’t allow them to drive. Foreign licensed drivers don't have a verifiable driving record, so they have a harder time finding insurance and pay higher rates. However, permit holders can be added to a policy with another fully licensed driver, such as a teen.
9. What is your marital status?
Select from married, single, divorced or widowed.
Why they ask: Married couples get a discount that individuals do not. Statistics have shown car insurance companies that married drivers are safer drivers.
10. What is your occupation?
Choose the job title that is closest to your current occupation from the list provided.
Why they ask: Insurance companies are all about risk. Data have shown that some jobs are correlated with fewer claims, which results in a discount. Educators, scientists and military members tend to get offered such discounts.
11. What is the highest level of education you’ve completed?
Select from high school degree, vocational school training or any type of college degree (associates to master's or beyond).
Why they ask: If you went to college and obtained a bachelor’s degree or above, a discount may be coming your way.
12. Do you or any other drivers in the household have any violations on your record?
The “look back” period for violations can be three to seven years. If you choose to buy a policy, the insurance company will obtain a copy of your motor vehicle record. But for quoting purposes, it will rely on what you say.
Why they ask: Your driving record is one of the most important rating factors that insurance companies use. It’s a great indicator as to the risk you pose as a driver. The more violations you’ve had, the higher the rates. The more recent the violation, the greater the perceived risk.
On the flip side, having a clean driving record will give you a good driver discount with most car insurance companies.
13. Do you or any other drivers in the household have any accidents or claims on your record?
If you’ve had an accident, insurers want to know all about it -- the date and type of accident, whether a claim was paid and, if so, how much was paid out for the claim.
Why they ask: Accidents again show the risk posed. Some accidents or claims may not affect your rates, such as damage that was caused by hail or hitting a deer. However, if there are multiple claims or accidents, even if you weren’t at fault for any of them, it shows a pattern that can raise your rates.
14. Do you own or rent your home?
Let the insurance company know if you own your home, rent, or if you have some other status such as living with family or in a college dorm.
Why they ask: If you’re a homeowner, you may get lower rates. Again, statistics show that homeowners tend to file fewer claims. The company may also offer to quote home or renters insurance for you to see if a bundling discount is available.
15. Are you currently insured?
If you're currently covered, say yes. If you’re looking for your first policy or to get a new policy after a gap in coverage, say no.
Why they ask: Insurers like drivers who have been continuously covered by insurance. If you have a gap in coverage that may raise your rates – or even keep some insurers from offering you a policy.
16. What coverages do you want on your policy?
If you want the same coverages, limits and deductibles as your present policy, have it handy to get the same coverage levels. You may want to discuss changing your coverage with an agent or representative to make sure you're not underinsured.
Why they ask: You can’t get a quote for car insurance unless the insurer knows what coverages, limits and deductibles you want to purchase.
Always be honest when shopping for car insurance.
Don’t just tell the insurer what you think it wants to hear.
Inaccurate information may help you get a better rate quote, but once inaccurate information is exposed -- and it will be during the underwriting, or verification, process – your quote will not longer apply.
An insurance company can decide to decline to offer you a policy at all – which is likely if you failed to mention something big like a DUI – or change your rate. If the insurer has already issued the policy, it can ask for an additional premium to be paid to keep the policy intact, or it will cancel it.
If there is something that is hiking up your rates, remember that every insurance company prices risk differently. It’s the whole point of shopping around.
