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What Question Do Car Insurance Companies Ask And Why?

Published On Nov 26, 2021 11:00 AM By InsuranceDekho

These questions are asked by insurance firms to determine your risk level. This enables them to calculate a suitable premium based on your specific risk profile.

When it comes to vehicle insurance, you'll have to answer a few questions upfront. Some may be clear, such as queries about your driving record, while others, such as questions about your schooling, maybe a bit more surprising. This information is requested by insurance companies in order to evaluate if you are qualified for insurance and, if so, at what premium. It's critical to be truthful and comprehensive while replying so that you may receive an accurate quote. The insurance company will review your information via a process known as underwriting, and if you supply erroneous or incomplete information, your policy may be denied or your premium may alter.

Frequently Asked Car Insurance Questions

Car insurance can be perplexing to purchase, especially if you are insuring your vehicle for the first time. Although there is a wealth of information available on the internet and the insurance company's customer service representatives are available to assist you, you may be hesitant to ask inquiries. Here are some of the questions that auto insurance may ask, as well as why the answers are crucial.

  • What's Your Postal Code?

This is the question that usually starts with a vehicle insurance quote. It's the first step in constructing your premium. A comparison site must know which of its clients can serve you, or a single insurer must know whether it serves your state. 

What is the significance of this?  - Territorial ratings are frequently used to determine rates. If you live in a city, you'll almost always pay more than someone who lives in the suburbs or in the country. Insurers establish base rates based on the quantity and severity of vehicle insurance claims in a given location. Cities have higher levels of traffic congestion and crime, resulting in more claims.

  • What Type of Vehicle will you be Insured?

You'll need to know the year, make, and model of the car. (If you locate a policy you wish to buy, you'll need to provide a vehicle identifying number, or VIN.) 

Why? — When setting rates, an insurer considers a vehicle's claims history and repair expenses since they demonstrate to the insurer how much, or how little, of risk, your automobile is to insure. A family vehicle, such as a minivan or SUV, will have lower insurance premiums than a small car operated mostly by younger drivers. This section isn't about you; it's about the claims made by everyone who owns a similar vehicle.

  • What is Your Vehicle's Principal Purpose?

Prepare to explain how you operate your automobile, for example:

  1. Getting to and from work (commuting)
  2. Getting to and from school
  3. Pleasure
  4. Business
  5. Farm
  6. Artisan

Why is that? — If you drive your car for business several miles every day, it poses a different risk to an insurer than a car that sits in a parking lot at work or a pleasure car that spends the majority of its time in the garage.

  • Each Year, How Many Miles do you Drive?

You should have a good idea of how many miles you put on your car each year. If you're unsure, try calculating your weekly miles and multiplying them by 52.

Why is that? — The more hours you spend driving each year, the higher your risk is to insurance. The "average mileage" varies, although most insurance set it at 10,000 to 12,000 miles per year. If you travel fewer miles, especially less than 7,000, you may be eligible for a discount. If you travel a lot more miles than the average driver, your insurance costs will be higher.

Take Away

Incorrect information may help you receive a higher rate quotation, but if the wrong information is uncovered – which will happen during the underwriting, or verification, process — your quote will be a bust. An insurance provider might either refuse to issue you coverage or adjust your rate, which is more probable if you forget anything major like a DUI. If the insurer has already issued the insurance, it can either ask for an extra premium or cancel it. If something is causing your premiums to rise, keep in mind that each insurance company assesses risk differently. It's the whole idea of window shopping.

Also Read: 

Significance of Cashless Garage Facility in India

What To Do If Magma HDI Car Insurance Policy Gets Lapsed?

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

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