Do auto insurance companies do background checks?

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In a nutshell...
  • Auto insurance companies examine your driving record
  • They also might look at your credit report and criminal history
  • Your criminal record goes back further than your driving record
  • You’ll pay more for car insurance if you have certain types of criminal convictions
  • You can get the best rates on auto insurance by comparing several policies and conducting regular reviews of your coverage

A criminal conviction can follow you around forever. It can make your life difficult in many ways.

With a criminal record, you might find it harder to get an apartment, a house, or a job. Even potential dating partners can harness the power of search engines to dig into your criminal past.

Criminal convictions can also affect you when you’re buying car insurance.

You probably already knew that auto insurance companies look at your driving history. Many of them look at your criminal history, as well.

If you have a criminal record, particularly for certain offenses, such as a DUI or hit-and-run, you enter a higher risk class, which can make your car insurance more expensive.

The following sections break down what car insurance companies consider when you apply for a policy. You’ll learn the different types of background checks to which you might be subjected.

If you are concerned about your criminal background and getting affordable auto insurance, compare at least three to four policies today to find the best rates for you! Enter your ZIP code above to begin!

Driving Records, Credit Reports, and Criminal Histories

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Auto insurance is a risk-based business. The insurance company takes a risk on every new customer it accepts.

The risk is that the company will end up paying more to you in claims than you’ll pay it in premiums. To mitigate this risk, the company charges your premiums based on what it thinks it’ll have to pay out in claims on your behalf.

In other words, the more confident the insurance company is that you won’t cost it much money, the cheaper your insurance. The less confidence the company has in you, the more you’ll pay.

It’s all about how much risk the company thinks you present.

Auto insurance companies measure your risk by looking into your background. The three most important places they look are your driving record, your credit report, and your criminal history.

– Driving Record

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Your driving record is one of the most important factors in determining your car insurance rates.

In the eyes of insurance companies, how you’ve driven in the past is the best indicator of how you’ll drive in the future.

If at-fault accidents and moving violations pepper your driving history, insurance companies consider you a risky customer. In turn, they charge you more in premiums.

If you have a perfect driving record, the company calculates less of a chance it’ll have to pay claims on your behalf. Therefore, they charge you lower premiums.

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– Credit Report

Some insurance companies consider your credit history when calculating your premiums.

If you have bad or limited credit, you’re considered higher risk because the insurance company fears you might not pay your bill.

The insurance company usually deals with this risk in one of two ways. One, they charge you higher premiums. Two, they keep your premiums the same, but they require you to pay a deposit or down payment up front.

Rather than paying monthly, you pay for three to six months up front. This way, if you get behind on your bill, the insurance company already has several months’ worth of premiums.

– Criminal History

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Your criminal history can reveal things that your driving record doesn’t. For one thing, your criminal record shows all crimes of which you’ve been charged or convicted, not just driving offenses.

It’s up to the insurance company whether to consider non-driving crimes when figuring your premiums.

Also, your driving record typically only goes back five years. If you had a DUI, reckless driving, or hit-and-run charge a decade ago, it might not show up.

But convictions stay on your criminal record forever. Insurance companies like to know about serious driving offenses such as the above, even if they happened a long time ago.

They look at your criminal record because it can be helpful in giving them this information.

– Charged vs. Convicted

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A significant difference exists between being charged with a crime and being convicted of a crime. If law enforcement suspects you of committing a crime, you’ll move through the justice system in three phases:

  • Charged with the crime
  • Tried in court
  • Convicted by a jury of your peers

At any point during this process, you might have your charges dropped.

For example, the court might review the evidence from the police and decide before your trial starts that there isn’t enough there to charge you.

You might strike a deal with the judge to accept a reduced charge or enter a diversion program in exchange for the charge being wiped out. Or you might take it all the way to the jury and get acquitted by your peers.

Unfortunately, public records are highly transparent, and even charges of which you’re cleared can show up years later.

For instance, if you were charged with DUI a decade ago and entered a first-time offenders program and had the charges dropped, insurance companies can still see that you were charged when they do a background check.

It’s hard to say whether they’d use this information to charge you higher rates, but it is possible.

Getting the Best Deal

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There are a couple of steps you can take to get the best deal on auto insurance regardless of your background. The first is to compare several policies side by side before making a decision.

Comparison shopping is particularly important if you have something in your background that might affect your rates.

Maybe you have a reckless driving charge from 15 years ago. Some insurance companies will count this against you, but others won’t. So you want to get quotes from several companies.

Once you decide on coverage, you should review it every six months to make sure it’s still the best fit for you.

If your needs have changed (maybe you changed cars or have a new driver in the house) then you might be better off with a different policy. Regular policy reviews can make sure you’re always getting the best deal.

Criminal charges can have lasting effects on your life, including your car insurance premiums. But shopping around can help you find a company that doesn’t penalize you for past offenses.

Looking for better auto insurance rates? Enter your ZIP code below and start comparison shopping today!

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