Insurance companies that provide policies for individuals various methods to assess their eligibility for automobile insurance. These can include the violations on a individual’s driving history, using a points system, and if there are any not at fault accidents. Insurers will either charge a higher premium or deny coverage depending on a driver’s eligibility.
One way in which insurance companies determine the eligibility for an individual for automobile insurance is to look at their driving history. The driving history provides the insurer with a list of all violations and tickets of an individual for a the past five years or so. They then use this information to determine if an individual qualifies as an acceptable risk to the company. If an individual has a poor driving history they can be ineligible for insurance and be denied coverage by the insurer. It is important to maintain a good driving record or risk paying higher car insurance premiums or being denied for coverage.
Some insurers use a points system to determine the eligibility of an individual for an automobile insurance policy. Insurers usually look at any violations or ticket that was received within the past three to five years. Each violation or ticket is assigned a point based on its severity. The most severe violations will receive the most points. These points are then added together and then applied to an insurance quote. If the points are too high an insured can either be charged a higher premium because of the increased risk or be denied for coverage altogether. Keep in mind that points that drop of a license within two years are not the same when determining eligibility for insurance.
Another way that insurers determine eligibility for automobile insurance is the number of claims and not at fault accidents that have been made. Even though the purpose of insurance is to pay claims having too many can lead to a policy cancellation or denial of coverage. Insurers have a distinction between at fault accidents and not at fault accidents. An at fault accident usually results in a ticket for the insured and a not at fault accident does not. A not at fault accident doe not necessarily hurt an insured until the amount of these claims increases in a short amount of time. Usually an insurer allows a specific amount of not at fault accidents for each policy term.
However an insurer determines eligibility for automobile insurance the result is still basically the same for the insured. They are going to either pay a higher premium for their policy or be denied coverage for insurance. Insurers use eligibility to determine the amount risk an individual will be for their company.