Eric Poe is the CEO of CURE Auto Insurance in Princeton, New Jersey, where he leads a team of more than 300 employees overseeing underwriting, claims, loss control, and litigation. Eric Poe, Esq., CPA, holds a bachelor’s degree in accounting from the University of Colorado and a law degree from Seton Hall University School of Law. He has testified before the U.S. House of Representatives Committee on Financial Services and multiple state legislatures on insurance affordability and rate-setting practices, and his advocacy contributed to Michigan’s 2019 reform banning the use of education and occupation as income proxies in auto insurance pricing. That focus on fair, data-driven evaluation closely mirrors the underwriting process that determines how insurers assess risk and set coverage terms.
Insurance underwriting is the review process that an insurer uses to decide whether and on what terms to offer coverage. In auto insurance, it is separate from a rating, even though customers view them as a single step.
Underwriting assesses the risk connected to an applicant and groups them into a risk class, while a rating assigns a price after that review. Underwriting addresses eligibility, while the final premium reflects the price of that level of risk.
It evaluates whether the applicant meets the insurer’s guidelines, identifies any necessary limits or conditions, and determines whether the information provided is sufficient to assess the risk. A company may accept an application, decline it, or offer coverage under terms that reflect the risk category it has identified.
That process begins with the application, but it rarely ends there. Insurers may review information about the vehicle, the drivers in the household, where the car is kept, and how it is used.
They may also obtain driving records from motor vehicle agencies and claims history from insurance databases. Each source helps the underwriter identify any factors that could affect the risk assessment.
An applicant’s claims history is one of the most common sources of outside information used in underwriting. Many insurers report auto claims to private nationwide databases, including the Comprehensive Loss Underwriting Exchange, commonly called CLUE.
These reports may contain personal auto and property claims history for several years, and insurers may use them when reviewing an application or quote request.
The point of that review is not to predict a driver’s future with certainty. Underwriting works by sorting similar risks.
A driver with recent at-fault accidents may be evaluated differently from one with no recent violations because the insurer is comparing the applicant with groups that have different claim patterns. That group-based structure is why underwriting can affect both eligibility and the later pricing step.
Underwriting also depends on the data quality. An incorrect vehicle garaging address or an outdated claims record can change how an applicant is evaluated.
Since insurers may use third-party data, the accuracy of outside records matters as much as the accuracy of the application itself. The underwriting file becomes a combined picture built from submitted details and verified records.
Credit-based insurance scores demonstrate how underwriting can involve specialized data. NAIC consumer materials explain that these scores are not the same as standard credit scores and may be used as one factor in underwriting where state law allows.
They are generally considered with other information, such as vehicle details, annual mileage, operator age, and other policy characteristics.
Underwriting also continues after the first policy period. At renewal, an insurer may reassess the policy based on changes such as new claims, additions or changes to household drivers, a different vehicle, or updated vehicle use.
The question remains the same: whether the risk still meets the insurer’s underwriting guidelines and how it should be classified.
Renewal underwriting is an ongoing risk management function, not just a one-time review before a policy is issued.
Underwriting can be thought of as the insurer’s intake process. It gathers and verifies information, evaluates risk, and provides the foundation for the coverage decision that follows.
About Eric Poe
Eric Poe, Esq., CPA, is the CEO of CURE Auto Insurance, based in Princeton, New Jersey, where he previously helped grow the company to more than 350 employees. He holds a law degree from Seton Hall University School of Law and a bachelor’s degree in accounting from the University of Colorado. Eric Poe has testified before Congress and several state legislatures on insurance reform and has received recognition including the NJBIZ 40 Under 40 and NJ Law Journal Trailblazers awards.
