Letter of Experience for Car Insurance: How do I get one?
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Discover the methodologyWhen looking for the right car insurance it’s easy to get overwhelmed. Between the shared number of providers, policies and premium ranges, the process is never straightforward. To top it off, some insurers request a car insurance letter of experience.
But what even is a letter of experience for car insurance and who needs it? How do you get one? What should it look like? We've got you covered.
This article breaks down everything you need to know about the elusive letter of experience for car insurance purposes and why you should get one. There's also a letter of experience car insurance template for your reference.
Letter of Experience Car Insurance: 4 Key Takeaways
- Car insurance providers request letters of experience to confirm insurance history
- They are provided by current and previous car insurance providers where a policyholder has had coverage
- They may expedite the insurance application process
- A clean car insurance record may lead to cheaper premiums
What is a car insurance letter of experience?
Simply put, a car insurance letter of experience is a document issued by your current or most previous car insurance provider, that contains the complete record of your auto insurance history with that provider.
The purpose of the letter of experience for car insurance providers is that it acts as a formal reference to which a new provider can assess potential clients for insurance coverage and suitability. Meaning, a new insurance provider can identify whether or not someone would be considered a high-risk client.
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What does the letter of experience for car insurance include?
The letter of experience is essentially a formal note from a previous insurer to a new one, giving the latter a behind-the-scenes peek at your car insurance history. Detailing your past coverage and driving habits, the car insurance letter of experience, therefore, typically includes:
- Policy details: This includes all the facts about the policy itself from the policy number, insured dates, extent of coverage, insured individuals and any additional insurance terms.
- Driving and claims history: Your claim history, whether successful or not, will be the backbone of the letter of experience and what your new insurer is most interested in seeing. It will mention the nature and number of claims, the individuals involved and whether a claim was accepted or declined. If declined, it will include information surrounding the rejection.
- Details of contract termination: The cancellation details are important as they detail why a policy was cancelled. From the end of the contract period to changing the insurer or selling the insured vehicle, the new insurance provider will want to know why a policy was terminated.
From the above, new insurers can gain valuable insights into you as a potential client. It will help them understand the risks they may face which will subsequently aid in underwriting and issuing fairer policies for all.
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What is the benefit of having a car insurance letter of experience?
The benefit for individuals of having a letter of experience when hunting for new car insurance is two-fold: you may receive faster quotes and lower premiums. The reason behind the former is that the new insurance provider will have immediate access to accurate information substantiating an application, and the latter may come from a clean claim record.
Letter of experience leads to faster quotes
When applying for car insurance, the insurance providers have to review your application form and verify your driving and insurance history. This process can lead to delays in underwriting and ultimately you receiving final approval on coverage from the insurer themselves.
When you provide the new insurance provider with a letter of experience for your previous car insurance along with your application form, you are already giving them a verified record of your car insurance history which can significantly expedite the insurance process.
Letter of experience for car insurance discounts
While there is no guarantee, a letter of guarantee from your previous car insurance provider may qualify you for a discounted car insurance premium in one of two ways.
Firstly, the letter of experience provides the new insurer with access to your full insurance history which will include any discounts that you may already have qualified for. Whether it be a no-claims (accident-free) or loyalty discount, the new insurer may transfer it to your new policy.
Secondly, a clean claim history and driving record are taken into consideration by underwriters when reviewing car insurance applications. A lower-risk policyholder as verified by a letter of insurance may lead to lower premiums.
Good to know
A clean letter of experience doesn’t always guarantee lower car insurance premium rates. It does, however, help insurance providers assess applicants more accurately which can lead to more competitive quotes.
Letter of experience car insurance sample
Here's a sample letter of experience car insurance template for your reference.
When crafting a letter of experience for car insurance, it should be structured to provide essential details regarding your insurance history. Below is a basic template you can adapt to your needs:
[Your Name] [Your Address] [City, Province, Postal Code] [Email Address] [Phone Number]
[Date]
[Insurance Company Name] [Company Address] [City, Province, Postal Code]
To Whom It May Concern,
Re: Letter of Experience for [Your Full Name], Policy Number: [Your Policy Number]
I am writing to request a letter of experience regarding my car insurance policy referenced above. I was insured with [Insurance Company Name] from [Policy Start Date] until [Policy End Date].
Please include the following details in the letter:
- Confirmation of the period I was insured under the aforementioned policy.
- The type of coverage I had.
- Any claims filed during this period and the outcomes thereof.
- My driving record as it pertains to any accidents or violations.
This letter will assist me in obtaining new car insurance and is required by my prospective insurer to determine my insurance premium.
I would appreciate it if you could provide this document at your earliest convenience. If you require any additional information, please feel free to contact me at [Your Phone Number] or [Your Email Address].
Thank you for your prompt attention to this matter.
Sincerely,
[Your Signature (if sending a hard copy)] [Printed Full Name]
Remember to adjust the content to suit your specific requirements and the practices of the insurance company you're contacting.
Where do I get a car insurance letter of experience?
Anyone can obtain a car insurance letter of experience from their current or previous insurance provider. The best practice is to request it directly from the insurer, as opposed to through an intermediary since they typically cannot write them up for you. If, however, you are struggling to get one issued, your insurance agent may be able to assist by providing the necessary contact details.
Once requested, the letter of experience may be issued electronically, via mail or both. Policyholders should make it a habit to keep hold of this document and keep it safe for future reference and insurance purposes.
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Who needs a letter of experience to buy car insurance?
You may not always need a letter of experience when buying car insurance. All insurance providers are different and not all request or require it to issue new policies. Despite this, there will be instances where you will most likely have to provide if you do want coverage. These situations usually include:
- When you have recently moved to Canada
- Recently moving to a new province or territory within Canada
- If you’ve been insured inconsistently
- Having not been insured for a while
- Having not been listed as the primary driver on a recent policy
Can my car insurance policy documents act as a letter of experience?
No, car insurance policy documents cannot be used as a letter of experience. This is because insurance documents focus on the insurance policy itself. It includes information on the insured, the insured vehicle, terms and conditions of coverage and the policy start and end date, but it doesn’t include any information on the history of the insured.
Letters of experience include all the information regarding the insurance policy, while also including the policyholder’s claim record and history as a driver. Furthermore, letters of experience are verified by the insurance provider, so new insurers can rely on the information provided.
Can an insurance company refuse to give you a letter of experience?
Yes, an insurance company can sometimes refuse to issue a letter of experience, but this is not common. Reasons for refusal may include company policy not to issue such letters, or if there are outstanding disputes or unpaid premiums on the account.
If you feel a refusal is unjustified, you may be able to seek assistance or file a complaint with a regulatory body or ombudsman overseeing insurance practices in your jurisdiction. The bodies change from one province to another.
For example, for car insurance matters in Alberta, you should contact the Alberta Insurance Council if you need to resolve issues or file a complaint. In Quebec, you can seek help from the Autorité des marchés financiers (AMF) for car insurance-related disputes. These bodies are tasked with regulating insurance and protecting consumer rights within their respective provinces.
