Insurance is about risk management. You pay for car insurance just in case you are in an accident or something happens to your vehicle. Your insurance company provides the insurance policy based on an assessment of the risks. This assessment includes analyzing a number of factors including your driving history. Insurance providers know that past behaviour is usually a good predictor of future performance. By analyzing your past driving history they can assess and predict how likely it is you’ll file a future claim and this has an impact on your current car insurance rates.
Rewards for less risk
Your driving history is one of the primary factors that decide whether or not you even qualify for coverage from a particular insurance company. It also has a strong influence on how much you need to pay for that insurance.
Insurance companies know that drivers who have not had an accident in the past six years are statistically less likely to be involved in a collision in the future than drivers who have had one or more collisions in the past. If there is less of a risk of a future claim the insurance provider will reward you with lower rates.
Violations are a factor
Accidents aren’t the only factor that determines your annual premiums. Another aspect of your driving history that insurance providers consider is the number of traffic violations you’ve had over the past three years. Drivers who have had a number of traffic violations are a greater statistical risk to be involved in a collision and file a claim. That means if you have moving violations or speeding tickets you’ll be assessed at higher rates than drivers with a clean record.
What if I can’t remember?
For many drivers however remembering whether or not they got a speeding ticket or other violations in the last three years is tough. Life is busy and not everyone can remember those details. So when asked they’ll tell their independent insurance broker they have a clean driving history. Problem is your broker can’t issue a new policy without first verifying the information you’ve provided. In Canada brokers and insurance companies use the AutoPlus system to track auto insurance claims. The database has access to more than 30 million claims over the past 15 years and by checking a driver’s license or policy number the insurance provider can establish your claims history and your level of risk for insurance purposes.
For this reason it’s not a good idea to hide past traffic tickets or insurance claims from your insurance broker. They’ll have to check this information anyway and if you end up omitting vital information you could actually be denied insurance coverage. Once you’re denied coverage it becomes much more difficult to get adequate insurance from a different company.
Get the right coverage with the right information
If you have questions call your independent insurance broker. By asking questions and expressing your concerns your broker can help you find cost-effective coverage.