Throughout the auto insurance industry, you have different carriers that specialize in different type risks. One type carrier markets to clients who fall into the high risk low limit category and could care less if they have current coverage or a lapse in coverage. Credit for this risk pool is usually not taken into consideration as the premiums are surcharged because of the high risk class. Motor vehicle reports are the main focus for determining the final rate.
Another type carrier deals with slightly better risks that have better credit with higher limits that have no lapse in coverage or possibly no more than a few days. This carrier usually requires that you supply the prior companies policy in order to honor certain discounts and will run a soft hit on your credit to apply discounts or credits based on the outcome. Motor vehicle reports are also run but the credit is just as big as a factor as the mvr’s.
The last type carrier markets strickly for the preferred client with great credit and who shop their coverage in advance. These carriers feel that someone who shops their insurance at least 8 days in advance is someone who has more on the ball and as a result will receive a further dicounted premium for doing so. These clients are the best of the above category and usually have very high limits of coverage. Credit is a bigger factor then the mvr.
Although this discount can save you up to 10% off your policy premium, this last category of shopping your insurance in advance is not too well known with the insurance population. Most of the time your agent will just quote your policy 8 days in advance without necessarily explaining why. If you end up needing it sooner then the 8 days the agent will then have to explain that you won’t receive the discount.
I hope this information has been useful.