Although motorists will be more familiar with established auto insurance companies when taking out a policy, the actual job of assessing the risk involved will usually fall within the boundaries of a separate company or institution specializing in car insurance underwriting. In most cases, this will be a bank although there are a number of external companies that also specialize in this field.
What do Underwriters do?
An underwriter will determine whether the price you pay for an insurance policy equates to the level of coverage required. This is done on a basis of risk and the underwriters will determine whether your driving history, credit record and vehicle make you a safe insurance option or a high-risk driver.
If you suffer from ill health, this will also be factored into any assessment. This could be down to the threat that you pose to other road users as well as to yourself. It is always important to make sure that information supplied to insurance companies is correct. If an underwriter finds conflicting information regarding your application, a policy can be refused or revoked. In many cases, this will make it more difficult to purchase an alternative policy elsewhere.
How does Underwriting affect the Buyer?
Companies or institutions that specialize in underwriting will build a profile based on all informational aspects supplied and these will be matched against other factors such as the value of the vehicle being driven or crime rates in a particular area. If the underwriter feels that any of these factors might have a direct influence on the risk involved, the final premium offered will inevitably increase. In some cases, restriction may also apply on the policy.