Categories: Guest Articles

Life Insurance How your Life Insurance Rates are Affected by your Driving History, and How Auto Automation May One Day Help.

 

Guest Post for Black Box Insurance, by Scott W Johnson

Most consumers have no idea all of the factors that go into determining their life insurance rates. Health, weight, and their family’s medical history seem to be somewhat obvious.   However careers, hobbies, criminal and driving history matter too.

Why Does My Driving History Change My Life Insurance Rate?

Life insurance companies are only allowed to rate life insurance policies based off a given insurers jurisdiction’s rules and regulations.  In the United States that means that insurers can rate based off of things such as Age, Health, Smoking Status, Sex; but cannot rate you based off your Religion and Race.   Insurance companies are also allowed to look at your past driving record to determine if you are considered a good candidate for life insurance.

Why this is – can be a bit of a mystery to consumers.   Violations such as DUIs and other major driving violations such as evading arrest may make your life insurance policy harder to procure and/or much more expensive.  But, depending on a given life insurance companies underwriting criteria, even a few simple speeding tickets could raise your proposed rates.

 

How they Do it:

On the insurance application you will typically be asked about your driving record.  After the application is complete the life insurer probably will order two reports, an MVR and a CLUE.   MVR stands for Motor Vehicle Report and will detail all of your driving infractions and confirm the validity of your state issued driver’s license. CLUE stands for Claims Loss Underwriting Exchange.   This report will detail all of your past insurance claims.  Together these two reports will give the insurance company a set of documents to confirm your past driving and claims history.

It is best to not find a discrepancy between these documents and your stated past driving history on your insurance application.

Life Insurance Rates:

This means that proposed insureds generally will find better pricing if they have a cleaner driving record.  Even minor points for going just five mph over the speed limit could lower your health class from preferred plus to preferred.  Therefore keeping a clean driving record is of paramount importance in order to save money.

Are Current Technologies Already Helping you Save on Life Insurance?

According to the Insurance Information Institute, vehicular deaths have plunged in the last nine years, between 2007 and 2016, by over 9%.  This is true even though more cars and more people are on the road.   The exact cause of the lower deaths is attributable to numerous factors, but advanced driving technologies are certainly already one of these factors.   These auto safety tools probably include airbags, vehicle stability control, and automatic tire pressure gauges, among numerous others.  Since there are fewer deaths on the road, it is fair to assume, that life insurance companies are paying out less claims due to automobile deaths and hence most people are already seeing lower life insurance premiums because of these technologies.

How Technology can help you:

Although still in its infancy, self-driving cars and black box technology may already be able to save you on life insurance.   Although statistics are probably not available on this yet, self-driving cars are possibly safer and less prone to accidents and tickets than cars that are being driven completely by humans.   If they are not safer yet, they certainly will be.  The self-driving car of the future will clearly be better at fully stopping at a stop sign than the average American citizen.

Did you Hear the One about Sweden?

The country of Sweden has set itself quite a goal: Zero highway deaths OR serious injuries on Swedish roads.   Can you imagine an entire country ridding itself of all deaths on roadways?  The Swedes can.  Obviously they are looking towards lower life insurance premiums too!  They are counting on new technologies to help them solve this pressing problem.

The combination of old and new technologies will continue to assist in lowering life insurance rates for many citizens of numerous countries.  Perhaps one day when we all hit the goals of heady Sweden  -Insurer’s will no longer even have to run your Motor Vehicle Report.

 

Scott W Johnson is the owner of WholeVsTermLifeInsurance.com – a comparative life insurance brokerage that assists consumers in choosing the right type of life insurance.   Their motto is: “Life Insurance is Complex, Don’t Get Lost!”   Johnson is passionate about technology and insurance.

Top