Once a valid auto insurance policy has been purchased, there are still a number of issues that can arise which all road users should be aware of…
8 – Credit Histories
Many auto insurance companies now use credit scoring as a means of establishing risk. Indeed, some carriers will also underwrite a policy dictated by previous payment histories and the increased likelihood of a claim being made. An increasing number of reports have highlighted a strong link between the scoring system and the filing of auto insurance claims. It should be noted that many consumer groups are actively fighting credit scoring as a means of establishing auto insurance rates and some states have already seen high-profile court cases where these groups have tried to see the procedure outlawed.
Road users are advised to obtain a copy of their credit records as a means of determining their own financial position. Entries that are outdated or inaccurate can be easily removed and if payment arrangements are made on any outstanding commitments, cheaper auto insurance rates will usually apply once credit scoring has been implemented.
9 – Cancellations
There are many reasons for cancelling an auto insurance policy and road users are advised to contact their existing auto insurance carrier to request cancellation forms. Ensure that there is an overlap period in coverage so that there will be no chance of taking to the road without sufficient auto insurance coverage in place.
In most cases, your old auto insurance company will need to see proof of coverage from your new provider. Failure to do so may see them contacting the local Department of Motor Vehicles and any lapses recorded against your name could lead to higher auto insurance rates in the future.