There is a lot of information that you must present when registering your car for car insurance coverage. Some of those things make complete sense to you, like license plate number and make and model of the car itself.
One thing that puzzles drivers is an insurance company's need for the vehicle identification number, otherwise known as the VIN. Know that, in order to receive a quote on an auto policy, a vehicle identification number is not required. If you want to purchase a quote though, you will need to provide the number.
So why do insurances companies need the number? It all comes down to one word: protection. The identification number was made in the early 1980's as a way to give cars of exact make and model a distinguishing feature. This way, vehicles could be matched and registered to their exact owner. For instance, if a car that had been reported stolen was later found in the woods, an identification number would help to make certain it was returned to its rightful owner.
Today, a VIN is used in much the same way. Car companies pay out millions of dollars every year in insurance claims and having a unique identification safeguards them against paying claims on cars that don't belong to that owner. In effect, it helps them to protect themselves, which in turn, helps you save money on your car insurance coverage.
Another reason that insurance companies require a vehicle identification number is to accurately track the history of a car. Every time a car is involved in an accident, the claim information is filed under the car's identification number. This way the company, as well as future owners of a car, can receive an accurate and detailed history of the car. Many used car dealerships will use the number to retrieve a vehicle's history as a courtesy to prospective buyers.
Let's say a person is involved in an accident where the front of their car was damaged. The person may then try and convince the insurance company that there was also damage done to the side of their car. With an identification number the insurance company can see that the damage reported to the side of the car was actually reported in an accident two years prior. This protects the insurance company from paying additional money on a claim.
Car insurance is all about protection. Not just for you but for the car company itself. Everyone is looking to protect the investment that they have made and having a unique identification on the car is the best way to prevent losing money or being taken advantage of.