What Is a Motor Vehicle History Report?
FREE Car Insurance Comparison
Compare quotes from the top car insurance companies and save!
Secured with SHA-256 Encryption
UPDATED: Mar 13, 2020
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We partner with top insurance providers. This doesn't influence our content. Our opinions are our own.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.
There are many reports utilized by insurance companies to determine what to charge you for your car insurance coverage.
Your “vehicle history report” is a record of the following:
- Previous accidents
- Car title issues
- Number of previous owners
- Service records
- And more
CARFAX Is a Leading Provider of Vehicle History Reports
You may recognize the name CARFAX; they are one of the leading vehicle history report providers.
So how can this information possibly affect your car insurance rate?
Insurers attempt to predict future losses, or insurance claims they will have to pay, using any information possible.
Ultimately, if any data point, or piece of information collected about a person or type of vehicle demonstrates tendencies toward an increase in claims frequency or severity, an insurer will charge that person or the vehicle owner more for coverage.
Vehicle history reports reveal that drivers who own vehicles involved in previous serious accidents tend to file more claims than those who own vehicles with no previously reported serious damage.
Data in the Reports May Raise or Lower Your Auto Insurance Premium
It may be that drivers who cannot afford to repair their vehicles out-of-pocket file more claims for damage repairs, or that they tend to be more accident prone in general.
The data doesn’t provide a definitive answer; it only proves that there is a correlation between previous accidents and future claims filed.
This may sound like another negative, but in reality, it lowers rates for those of us who don’t fit those categories identified as having more claims.
The insurance company’s goal is to charge the least amount possible to those who have the fewest overall claims and vice versa.
Essentially, those who file more claims are charged more.
However, insurance companies cannot simply make up rates or false rating factors.
Each state has a department of insurance that governs what insurance companies can charge for insurance.
The insurer has to prove the information they use to calculate their rates is legitimate.