What Car Insurance Companies Only Ask for Three Years of Driving History, Not Five Years?

The market for auto insurance is highly fragmented and often undergoes drastic and surprising changes within relatively short periods of time. The cost of an individual driver's insurance depends upon a range of factors, including where he or she lives and the details of his or her recent driving history. Many drivers wonder about how the interplay between these two factors may circumscribe their options for finding cheap car insurance.

You're probably aware that you'll have to pay more for car insurance after receiving certain traffic citations or being involved in an accident for which you were determined to be at fault. The exact amount by which your premiums will rise after each such event largely depends upon the whims of your insurance provider. When you sign up for a new insurance policy, most providers will look at the last five years of your driving record to calculate the annual cost of your policy.

In many states, this five-year window is codified by state law and can't be reduced. In others, insurance companies that choose to do so may be permitted to look back just three years. Other providers may prefer to look back as far as seven to 10 years. So-called "discount" insurers tend to use shorter "look-back" windows. On the other hand, full-service insurers that may offer substantial perks and discounts for longtime customers tend to use longer "look-back" windows to deter unsafe drivers from signing up for their policies.

If you're looking for an insurance company with a shorter "look-back" window, you'll first need to determine that you live in a state in which such truncated windows are allowed. You'll also need to determine whether your state subjects every event that could affect your insurance premiums to equal treatment. Some states permit insurance companies to use "look-back" windows of just three years when assessing the pricing impact of minor traffic violations while mandating periods of five years or longer for more serious accidents or vehicular crimes.

Before you purchase or renew an insurance policy, call your issuer to confirm that its policies remain unchanged. Most customer-service representatives will be able to provide information about look-back periods. In addition, they'll be able to answer your questions about the extent to which a given event is likely to affect the cost of your insurance policy. Alternatively, you could use a centralized database like your state's motor vehicle bureau or certain online driver forums to ascertain this information.

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