Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Oct 13, 2020

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Here's what you need to know...

  • If you’re shopping for car insurance, it’s best to be prepared and to get multiple quotes to find the best rates
  • You’ll need a valid U.S. license or an international license that’s recognized in the country to qualify for coverage
  • All insurance quoting forms and applications ask questions about your driving history and driving habits for rating purposes
  • You’ll need to provide information on your vehicle so that the company can assess risk and your exposure to loss
  • If you fail to provide the insurer with accurate information, it’s possible that you’ll be given a misquote that will change after everything has been verified

Decades ago, when you were ready to purchase auto insurance, you needed to allow quite a bit of time to sit down and review auto insurance quotes.

Now, with advanced systems and access to the Internet, it’s possible to quote the cost of coverage both in-office and via the world wide web.

Some auto insurance carriers promise consumers that they can receive a custom insurance quote in as little as 5 minutes.

Even though the process of purchasing insurance has been simplified, there is still a long list of underwriting guidelines that you must meet before you’ll be considered eligible for coverage.

If you’re not sure how to approach your mission to find car insurance on your new car, it’s important that you learn about underwriting criteria and the information that you’ll need to provide to get the most accurate quotes possible.

Start comparing car insurance rates now by using our FREE tool above! Enter your zip code now to get started.

Table of Contents

What are the underwriting guidelines for licensing?

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Before you get started, you should look into licensing requirements to see if you qualify for a standard personal auto policy.

While every company has its own unique rules surrounding licensing status, virtually all companies will deny an application for coverage if your license is currently suspended or revoked.

If your license is currently not active, you may need to purchase a high-risk auto policy to reinstate your license before you can buy a standard policy.

High-risk insurance is offered through substandard companies and also through carriers that provide non-owners auto insurance.

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How do auto insurance companies view an active foreign driver license?

If you currently have an active license but it wasn’t issued in the United States, you’ll need to find out what the underwriting guidelines of the insurer surrounding international licensing.

Canadian licenses and Mexican licenses are often accepted by the big name insurers, but other licensing might not be accepted to satisfy the underwriting criteria.

If you have an International Driving Permit, it’ll be much easier to find low-cost insurance because the permit will translate your out-of-country driving experience and record.

You’ll need to do the following to apply for an International Driving Permit if you don’t already hold one:

  • Complete the IDP application form
  • Submit two original passport pictures
  • Pay the application fee
  • Photocopy your driver license
  • Mail your application or submit in your home country before driving in the U.S.

What are the requirements for vehicle registration and ownership?

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The next item on the underwriting requirement checklist will be vehicle ownership and registration guidelines.

Insurance companies are very strict about who can and who can’t insure a vehicle.

When you’re buying standard coverage through an industry leader, you’ll need to be the registered owner or co-owner of the car.

The only other scenario where an insurer might allow someone who’s not on the registration to insure it is when they hold the title.

This is such a strict rule because it specifically saying in an auto policy contract that the named insured, or policy owner, must have an insurable interest in the insured property or they can’t cover the property.

There are exceptions to the rule when it comes to spouses, parents, and children, but you’ll need to verify these with the company directly to avoid coverage disputes.

What are the vehicle usage requirements?

Insurance companies take a real interest in your driving habits.

They want to know how often you drive, where you typically drive to, what hours of the day you’re on the road, and what territories you’re primarily in.

Unfortunately, there’s some confusion as to what types of usage are covered under a personal auto insurance policy.

Personal car insurance policies are designated to private coverage for personal use.

While these policies do provide coverage for cars that are driven to work or to business sites each day, the car has to have a personal purpose.

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Here are some types of usage that are excluded from a personal plan:

  • A business vehicle that’s only used for business
  • Vehicle that’s owned by the business and used for personal and business use
  • Vehicle that’s driven by a company’s employees
  • Vehicles used in the delivery of people (limos, shuttles, taxis or freight trucks)
  • Vehicles used in the business of selling, storing, parking, repairing or servicing of other autos
  • Vehicles used for delivery of picking up newspapers, food or other products in exchange for money

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What are the requirements surrounding other drivers in the household?

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When you ask for a quote or apply for insurance, you’re going to be asked about other family members in your home.

You might be tempted not to mention a specific driver who you know has a led foot or a problematic driving record but failing to disclose all of the household drivers who have access to your car could be a big mistake.

If you don’t disclose the household members who are over 15 or who have their driver license, you could be responsible for material misrepresentation.

This means that you intentionally lied on your application and claims may be denied if you file one when the unlisted driver has a loss.

Just remember, if a household member has other insurance, tell your insurer and they won’t be considered chargeable on your plan.

What does the insurance company need to know about your driving record?

Your driving record is a big deal to the insurer.

Just because you haven’t yet cost the company money doesn’t mean that you won’t after your policy inception date.

Your driving record paints the company a picture of how you obey the laws and how responsible you are when you think no one’s looking.

If you have several violations, serious convictions, or you’ve caused multiple accidents, the company wants to know.

In fact, you’ll need to disclose a list of your accidents and tickets going back between 5 and 7 years so that the insurer can be sure that you and all other drivers in the household meet underwriting guidelines.

Those with a combination of tickets and accidents may have to buy high-risk insurance.

Why is prior insurance so important to insurers?

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You might think that you’re asked about prior insurance just so that the company can gloat about taking a client from their competitor, but this isn’t actually the case.

Insurance companies see prior insurance as a positive thing because it shows that you’ve paid for coverage continuously and that you have a policy to check for claims.

Providing proof of coverage on your own or on a family members policy can get you a preferred rating and a prior insurance discount.

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Things You Need to Gather for Your Auto Quote

Now that you know what you need to qualify for your own personal car insurance policy, it’s time to prepare to get quotes.

Having all of the little pieces of information that you’ll be asked for can really save you loads of time and hassle.

Here’s a list of the most common items that are found on quoting forms:

  • Name, date of birth and driver license numbers (current and past)
  • Household members
  • Accident and violation dates and descriptions
  • Vehicle make, model, VIN
  • Aftermarket features and security information
  • Vehicles usage: pleasure, commute or business?
  • Number of miles for commute
  • Miles driven per month or year
  • Is the vehicle leased or financed? Loss payee name
  • Coverage options selected
  • Prior insurance policy number

Now that you know what you need to price and buy insurance, it’s time to get started.

If you want to get quick quotes from several companies at once, use an online rate comparison tool and you can get everything do in a fraction of the time.

Start comparing car insurance rates now by entering your zip code in our FREE tool below! Enter your zip code now to get started.