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UPDATED: Mar 13, 2020
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The car insurance Household Drive Report is something the automobile industry uses to gain knowledge about specific criteria on drivers. It includes the current number of registered vehicles within a single home as well as any residents that lived there previously who had registered vehicles.
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The Household Driver’s Report also contains driver’s license information, like age and dates of birth. The car insurance companies can only obtain this report by contacting the Household Driver’s Report, INC, located in Friendswood, Texas. They hold the patent and trademark.
With this data, car insurance companies can create all types of forecasting models for patterns to use in their calculations of rates and prices. It is a useful document, which allows them to compare trends within certain areas.
Other Useful Reports Utilized by Car Insurance Companies
Car insurance companies also utilize a report called the Comprehensive Loss Underwriting Exchange, or CLUE. According to the Utah Insurance Department, this report is used by the automobile insurance industry to assess your risk to determine the likelihood of you filing a claim. The CLUE report tracks losses for the insurance industry.
A vendor called Choice Point, not the car insurance industry, maintains this report. They receive information from the car insurance companies, when you file a claim. In some instances, they can even regard your inquiries about a claim. The car insurance industry uses this information, along with other factors, like your insurance score to decide if they will offer a new policy or renew a current policy.
If the information contained in your CLUE report shows unfavorable data, due to inaccuracies, you may be considered a high risk and therefore turned down for car insurance coverage. It is very important that you review your report for yourself. The Fair Credit Reporting Act makes provisions for consumers to request their own copy of their CLUE report for the sole purpose of verifying the contents.
If you find errors, such as a claim you never filed or the wrong amount listed for your loss payment, you must contact the vendor directly and advise them of the issue. They can contact the car insurance company and request clarification.
Each car insurance company is required to reply within 30 days of the notice. They must provide proof and confirm the information is accurate.
If the car insurance company does not respond, or fails to respond within 30 days, the negative data can be removed from your report and the database. This is why it is so important that you act immediately. Errors can cause a number of problems unnecessarily. You should be pro-active and make sure everything listed is correct.
Auto Insurance Reports
Automobile insurance reports are customer based, but not personal. This means they do not contain any of your personal information. Instead, these reports are a combination of trends within the car insurance industry. They are used by car insurance companies to help understand the entire market, not just individuals who hold policies.
These reports take into consideration the entire history of the industry and try to build projections for the future. They include regulations and legislative changes as well as profit and losses over a certain period of time. This helps the entire automobile insurance industry remain competitive.
The statistical data these reports contain also feature state specific information, especially those in the metropolitan areas because this is where most changes occur first. This is how rates are impacted and why some states have a higher average for car insurance over others.
The Car Insurance Score – How it is Determined
The car insurance score is determined by two factors, your credit and your insurance and accident claim history. The combination of this information makes up your car insurance score; the ratings are similar to credit scores, ranging from 300 to 900, if you use the Fair Isaac scoring system.
The Fair Isaac system is similar to credit scores. If your score is high, your car insurance rates will be favorable. If your score is on the low end, your rates may be very high. The majority of car insurance companies look for scores between 700 and 720.
You can begin to make positive changes to increase your credit score by decreasing your credit to debt ratio, paying bills on time, and refraining from using your credit cards unnecessarily. However, unlike credit scores, it is very challenging to increase your insurance score because it includes your claims history.
It is not entirely impossible, but it will take time. You will need to begin to change your driving patterns in a manner that decreases your instances of motor vehicle collisions. You can try taking a few courses offered by the Motor Vehicle Commission to see if that helps, but you may just need to exercise patience, along with caution. Over a period of three years or so, you should see improvements.
The Driving History Abstract
The car insurance industry also uses your driving history abstract as a way to calculate your rates. The information on your abstract has the number of times, if any, your driver’s license has been suspended and lists the number of points you have. In addition, it shows if your license has been revoked. If you have been convicted for traffic violations or failed to appear in court, it shows that as well.
One of the main reasons the car insurance company’s look at your driving history abstract also to determine your risk profile. If you have a number of negative entries on your abstract, your risk level is higher than those who have very few.
They also want to determine how well you obey the laws of your state as they relate to your character. They will look for specific violations.
For example, a driver with multiple speeding tickets shows a lack of regard for others on the road as well as pedestrians and private property. Speeding affects your ability to control your vehicle properly because it cuts down your response time to unforeseen situations.
You cannot expect to yield to oncoming traffic if you are driving too quickly. The same can be said for obstacles in the road. If you are driving over the speed limit and you suddenly encounter an obstacle in your path, how quickly will you be able to avoid a collision?
You can contact the Motor Vehicle Commission in your state to obtain your copy for only $10, depending on where you live. If you have access to the Internet, you can have the report in your hands in as little as five minutes. If you cannot go online, try to go directly to the MVC in person, since the mail option can take as long as two weeks.
Take the Proactive Approach
You do not have to be passive when it comes to how the car insurance companies view you. You can research their actions too. This means you can review their reports the same way they review yours and make a decision as to whether you wish to remain a customer.
One of the best resources for researching car insurance companies is J.D. Power, a well-known and highly respected company that takes ratings very seriously.
If you want to know how well your car insurance company ranks among the industry leaders, simply look for their name and view the statistics.
J.D. Power ranks their companies with stars. If your company is average, they will have at least three stars. However, if they excel in the area of overall customer satisfaction, they should have four to five; five is the highest ranking and considered exceptional. To meet this standard, a company must provide excellent service in the areas of billing, price, and policy specifications.
You should not stop with customer satisfaction though; you should also dig into their finances. Find out how they manage their revenue. A solid company with a strong foundation should have great earnings. A.M. Best is a financial ratings company that your car insurance company should have affiliations with when it pertains to their finances.
See where they are strong and where they can improve. A score of an A is great, but a score of A++ is excellent. This shows responsible spending and smart investing. You want to work with a car insurance company that knows how to balance superb customer service and financial obligations.
Never Become Complacent
Now that you have an idea of the ways the automobile industry operates as a whole, you are empowered to make changes. Think towards the future and employ tactical strategy. Use the information that is available to you and make smart decisions.
The resources your state provides includes ways to keep you informed of changes before the car insurance industry implements them.
Do not forget that the car insurance industry is constantly looking for new products and ways to market them to their current customers and new consumers.
Make a conscious effort to stay open to take advantage of every opportunity that can keep more money in your pocket and less in payments towards your annual premium.
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