Insurance is an important safety net to have in all facets of our lives. Acquiring this protection is a process that shouldn’t be rushed, taking the time to review quotes no matter the coverage. This is more than just the premium you pay: It also includes deductibles, terms and conditions, and policy exclusions. For insurance companies, the same goes for looking into you as a risk on their policies. Let’s take a look at some of the investigations that insurance providers delve into before signing you on board.
Auto Insurance
If you’ve had a history of insurance claims or traffic violations, you may be asking yourself, how long do insurance companies keep records? Auto insurance providers on average will check as far back as five years into your driving record to look for any red flags that may keep them from offering you coverage. Accidents, speeding tickets, and other traffic violations can stay on your driving record for up to three years. Keep in mind that certain claims and violations will send premiums skyrocketing. The greatest example is having a DUI on one’s record that can triple or quadruple monthly expenses based on your car insurance company.
State law can dictate how far insurance companies will look into your experience behind the wheel. Some parts of the U.S. carry something called a washout law or look-back period. This law describes the number of years a DUI conviction remains on your record. Though high-risk drivers may be paying more in terms of their monthly premium, they are still eligible for discounts depending on the auto insurance company that will have them.
Homeowners Insurance
When it comes to homeowners coverage, insurers will look back three to seven years when evaluating claims history. However, just like in auto insurance, all claims are not created equal. Most insurance companies will not use weather-related claims against you, as these are not within your control. Higher-risk insurance claims draw more of a red flag for providers. This includes but isn’t limited to water damage, liability, fire, theft, and dog bites.
Statistically, one in every 20 new homeowners files a claim in their first year of ownership. If you have one claim through five years, insurance companies tend to deem you a good risk. Once you pass the milestone of two insurance claims for homeowners coverage, that’s when companies become a little bit more hesitant about offering their insurance products. You can also spare yourself in terms of savings or rejection from a company based on what you want to be covered under your insurance policy.
Life Insurance
Life insurance coverage is something that most tend to put off until later in life, but the truth is that buying a life insurance policy at a younger age is a better option. You don’t need extensive coverage at that age, but you are deemed a minimal risk by most insurance companies. If you have minimal medical records, you are in the best place to capitalize on affordable coverage that you can expand as you get older or grow your family.
If you opt to get life insurance later down the line, some providers will go as far back as seven years to evaluate your overall health. Significant health issues like high blood pressure, high cholesterol, and heart disease raise alarms for some insurers. Other companies will look into your line of work and the risk there, as well as some of your habits, like if you’re a tobacco user. You can opt for a life insurance policy that doesn’t require a physical exam or medical records, but those premiums are usually significantly steeper. Remember, with any insurance policy, review your quotes thoroughly before signing on the dotted line.
