California Property & Casualty Broker-AgentCalifornia LawMedium
A California Property & Casualty Broker-Agent is approached by a client who previously had their auto insurance policy non-renewed by another insurer due to a high number of at-fault accidents. The client asks if this non-renewal information will be accessible to other insurers when they apply for new coverage. Under California law, what is the maximum number of years an insurer can consider an applicant's driving record, including at-fault accidents and violations, for underwriting purposes?
- A5 years
- B3 years
- C7 years
- D10 years
Show answer & explanationAnswer & explanation
Correct answer: A. 5 years
California Insurance Code limits the period an insurer can consider an applicant's driving record, including at-fault accidents and violations, for underwriting purposes to a maximum of 5 years. This helps prevent past issues from permanently impacting insurability.
Why the other options are wrong
- B. This timeframe is too short; some violations can be considered for longer.
- C. This timeframe is too long for standard underwriting of driving records.
- D. This timeframe is significantly longer than allowed by California law for driving records.
Driving Record Underwriting Look-Back
In California, insurers are generally limited to considering an applicant's driving record (accidents, violations) for a maximum of 5 years for underwriting purposes.
- Applies to auto insurance underwriting decisions.
- Prevents excessively long-term penalties for past driving issues.
- Certain severe convictions (e.g., DUI) might have different look-back periods for specific purposes, but 5 years is general for accidents/violations.
Memory trick: Five years maximum, for your driving past, to last.