Underwriting standards are rules insurance companies use to decide whether to insure you. Insurance companies typically review the following when deciding whether to insure you:
- driving record
- car make and model
- prior insurance coverage
- consumer credit history
- credit scoring
Many insurance companies look at a consumer's credit. Insurance scoring has been controversial, and a number of states, including Oregon, have placed limits on its use. In Oregon, insurers can't use a policyholder's credit information to raise premiums. Also, the law prohibits insurers from canceling or refusing to renew existing policies because of credit history problems.
If you are approved for coverage, the insurance company will place you in one of three basic categories of drivers: preferred, standard, or nonstandard.
Preferred: This category is for drivers considered the best risks, which usually means the safest drivers.
Standard: This category is for drivers considered moderate risks. People in this category usually drive "family" cars and have reasonably clean driving records.
Nonstandard: This category is for drivers considered high risk. Drivers under 25, with little experience, with histories of tickets or accidents, poor premium-payment records, and convictions for driving recklessly or under the influence of alcohol or other drugs.
Types of coverage
When you purchase an auto insurance policy, you're really buying several types of coverage. There are seven basic types of coverage:
- Bodily injury liability coverage pays for damages other people incur if you or someone you allow to drive your car causes an auto accident.
- Property damage liability coverage pays for damage to other people's property if you or someone you let drive your car causes an auto accident.
- Personal injury protection (PIP) coverage pays for medical, rehabilitation, funeral, childcare expenses, for loss of earnings, and in-home assistance - regardless of who is at fault.
- Uninsured motorist bodily injury coverage pays medical, rehabilitation, funeral expenses, loss of earnings, and other damages if you are involved in a vehicle, bicycle, or pedestrian accident caused by an uninsured motorist or a hit-and-run driver.
- Uninsured motorist property damage coverage pays for damage to your auto caused by an uninsured driver. This optional coverage duplicates your collision coverage, but if you don't have collision coverage it may be a good buy.
- Collision coverage pays for repairing your vehicle in a collision or rollover.
- Comprehensive coverage pays for damage to your vehicle resulting from theft, vandalism, windstorms, fire, hail, etc.
See our topics "Oregon State Minimum Insurance Requirements", "Filing a Claim", and "Auto Insurance Discounts" for additional help from our website. Or, visit the State of Oregon for a full Buyers Guide at http://www.oregoninsurance.org/publications/consumer/2085.pdf