Although it's purpose may not immediately be clear, auto insurance
companies often ask the drivers who are applying for insurance about
the length of time they've been covered by other companies. This
information helps the company determine important facts about your auto
insurance history. It is one piece of the many components that they
consider when determining the right rate for your insurance policy.
Customers with a history that shows continuous coverage are displaying
their responsibility, both as drivers and as customers. By paying your
auto insurance premiums on time and in full, you are demonstrating to
all insurance companies that you will pay your bills promptly. You're
also displaying your understanding of the law, as auto insurance is
required in all states. Driving without insurance is illegal, and can
convince car insurance companies that you're likely to overlook other
laws, such as traffic laws. Drivers who have a history of lapsed
coverage and driving without insurance often also have a higher risk
for accidents.
If you do have lapses in your insurance coverage history do to other
issues, such as being without a vehicle or injured and unaware to drive
for a long period of time, it may be helpful to let the agent or
customer service representative know. Some companies will take this
into account when considering your record.
Also, when you have decided to purchase a new policy or plan and are
switching companies, be sure to make sure your coverage overlaps. Going
without insurance even one day is illegal, and adds a gap to your
coverage history that can cost you with higher rates. Auto insurance
companies reward drivers with good driving records, and having
continuous and promptly paid auto insurance is one part of your record.
It's also important to drive safely and avoid auto accidents or traffic
violations that will cause your insurance premiums to rise.
If your auto insurance policy is coming to an end soon and you'd like
to switch companies, be sure to check with your new insurer for the
delay before starting a new policy. Some companies will make you wait
up to 30 days, which can result in a lapse of coverage if your current
policy is ending in a week. Others can complete your insurance switch
in as little as 48 hours, and you may even be able to get a refund on
any premiums already paid to your old insurance company after canceling
that policy.
