Do Car Insurance Companies Do Background Checks?

Do Car Insurance Companies Do Background Checks?

Do Car Insurance Companies Do Background Checks?

Car insurance companies often check the driver’s background if they are acquiring auto insurance. Your history could affect some aspects of your life. It starts from applying for work getting a license and other more aspects. Having a bad record and criminal record could negatively impact your life. However, this is not the end of being a good one. 

Car insurance is one of the protection that is required to purchase in California. So since it is mandatory, you have to know how car insurance companies check your background. Additionally, you also need to understand how your background could affect your rates and if you purchase one. Get free quotes here from A-rated car insurance companies and compare which could protect you the most. 

How Do Car Insurance Companies Do Background Checks?

The insurance industry is a risk-based business. Insurance companies accept the risk of the insured customer. The risk is the insurance provider could end up paying the insured more — than what’s the insured is paying for its policy. Since the insurance providers accept the risk, they think of a way to alleviate this risk. The idea is to charge the insured on what they think they could payout — if the insured files a claim. Car insurance companies measure the risk of the insured by looking at their background. The three significant aspects that they are looking for are the individual’s credit report, criminal history, and driving record. Car insurance companies always take the driving record of the insured as a significant factor in determining its premium. Since, insurance companies, see the past record of the insured, as an indicator of how the insured will file a claim in the future.

What Is Included On Background Checks Of Car Insurance Companies?

  • Criminal Background
  • Driving Records
  • Employment Information
  • Marital Status
  • Credit Report

Car insurance companies are not the same as others; that is why comparing quotes are essential. Other companies put stress on the driver’s credit score, while others put more weight on the driver’s employment history.

Criminal Background Check Of Car Insurance Companies

A criminal background check is generally included in an employment and insurance background check. Background checking is a legal investigation from the proposed insured’s past that could help determine its probable risk in the future. This background checking could also help the insurance companies if they will insure the individual or not. The information that shows up on this record includes criminal convictions, felony, and other criminal cases. Criminal backgrounds can also include the history of past warrants, active warrants, incarceration, and infractions. However, with regards to infractions — it can only be reported if it is within the last seven years.

Additionally, arrests that do not lead to convictions may also appear on background checks. 

Want to know how to get car insurance that does not discriminate against individuals by its criminal background?. Here we can help you with that. 

 

Types Of Criminal Records That May Show Up On Criminal Background Check Of Car Insurance Companies

Infractions Or Violations Such as; drinking in public, littering, jaywalking, disturbing the peace or silence, as well as, building permit violation.
Misdemeanor Criminal Convictions Trespassing, pubic intoxication, prostitution, theft and vandalism
Felony Criminal Convictions Murder, rape, kidnapping, theft that are larger than $500, as well as, manslaughter.

 

Infractions Or Violations

 Such as; drinking in public, littering, jaywalking, disturbing the peace or silence, as well as, building permit violation. 

 

Misdemeanor Criminal Convictions

 Trespassing, pubic intoxication, prostitution, theft and vandalism

 

Felony Criminal Convictions

 Murder, rape, kidnapping, theft that are larger than $500, as well as manslaughter. 

Petty offenses such as harassment and disorderly conduct are often defined as quasi-criminal violations and not a form of criminal offenses. These offenses are punishable by fines and not by spending time in jail. Additionally, depending on the jurisdiction, infractions do not show up on background checks. However, in Federal Law infractions must be reported if it happens within the last seven years.

Driving Record

A driving record or also a motor vehicle report is a collection of public reports that are related to a driver. This record consists of information about license tickets, and accidents of the driver. Insurance companies keep an eye on the driver’s driving record — because it could help them predict the insured’s risk of filing a claim in the future. In the cognitive of insurance providers, if the driver has more marks on his driving record — it is a red flag that the insurance company will cost more if the driver made a claim. 

 

Rates For Drivers With Bad Driving Record

If the driver has multiple driving tickets, the driver is more likely to incur an accident in the future. Therefore, the insurance company could charge him a higher premium rate because the company could lose money in the form of claim payouts. Rates for car insurance premiums of individuals who have driving violations vary on car insurance providers.

 

Traffic Violations And Traffic Tickets In California

 

Misdemeanor

 These traffic tickets is a serious driving offense, including driving without a license and over speeding. Additionally, driving under the influence or while intoxicated is also considered a misdemeanor violation. 

 

Felonies

This traffic violation may occur if the driver causes bodily injury and property damages to other people. The most common type of felony is driving under the influence of alcohol or while intoxicated. 

 

Infractions

These tickets include all the basic traffic violations, such as; running a red light and failing to signal and failure to wear seatbelts offense. The majority of driver violations are classified as infractions. This violation is the least serious violation of all traffic offenses. A typical example of infractions include:

  • Failing to stop to red traffic lights
  • Failing to signal while turning to the other side of the street or while stopping
  • Using or operating a vehicle without proper lighting
  • As well as not wearing seatbelt violations
  • Last on the list is speeding.

Felonies

This traffic violation may occur if the driver causes bodily injury and property damages to other people. The most common type of felony is driving under the influence of alcohol or while intoxicated.

 

Moving And Nonmoving Violations

In traffic violations, moving violations are more severe than nonmoving violations. Nonmoving offenses include parking of vehicles illegally and defective equipment on the car.  

 

Criminal Traffic Offenses

A traffic offense that is punishable by imprisonment is considered a crime by jurisdiction and federal law. Examples of driving crimes include;

  • Driving under the influence of alcohol or drugs (DUI)
  • Reckless driving 
  • Driving with revoked and suspended license
  • Lastly, the most serious of all is vehicular homicide.

Felony Or Misdemeanor

Some driving offenses that are classified as misdemeanors could become a felony under some specific circumstances. The states of California and other states elevate the misdemeanor traffic violations into a crime if the driver is;

  • A repeated offender,
  • If the offense results with death, injuries, and property damages. 

Employment Information And Address

The proposed insured’s address and employment information are also used to determine the car insurance rate of an individual. If your address is not known for having a high crime rate, you could typically get a lower premium. Additionally, the individual’s employment information has a significant impact on the insured’s premium — because it determines how often the insured is driving on the road.

Marital Status

Based on a survey done by California Law, there is a huge difference between the accident rates of married individuals and singles. In the study, the rate of accidents is higher on single drivers than on married individuals. Therefore, car insurance rates for single drivers are a little bit higher due to their accident risk. 

Credit Report

Some insurance companies include the credit score of the individual as a basis of his premium rate. Credit reports include the loans, debts, and bill payment history of the individual. If the individual has a low credit score, it means that the individual can’t pay its bills. Therefore, the insurance company will consider the individual with o high risk and could garner a higher insurance rate. However, some insurance companies deal with this, with other alternatives. They keep the premium the same as the other, but they will require the individual to pay a downpayment or a deposit. But in most cases, some insurance companies do not consider this factor to affect the insurance premium of the individual, so whether the insured has a higher or lower credit score — they will still get the same premium.

Let us help you find an affordable car insurance rate with comprehensive coverage. Get a free quote now and start your protection today.