Not only can having too many claims double or triple your premiums, it can make you ineligible for standard coverage through a more risk averse insurer. Especially if you’re looking at local companies that generally promise local service, even one accident could disqualify you. This is why it’s crucial that you know everything about claims and the toll they can take on your record.
Anytime that you request a quote for auto insurance, the carrier will ask you about the claims that are reported on your record. Agents will take your word for it when you’re getting estimates, but they’ll go a step further after you apply for coverage. Every insurance company will automatically run CLUE and MVR reports to pull up any tickets and accidents within a certain time period. They have to confirm what you’ve told them both because people leave things out and sometimes forget.
- Claims stay in a shared database for seven years, accessible to other insurers
- At-fault claims remain chargeable on your record for three years after they’re closed
- Insurers report claim details to the C.L.U.E. database once a claim is settled
Enter your zip code above to compare car insurance rates from multiple companies at once! Here’s what you need to know about claims and how long they’ll be on your record after a loss:
What types of claims will affect your rates in the future?
Not all claims are bad claims. Bad claims, in the insurance industry, are classified as at-fault losses that occurred because of your actions.
In almost every state, your actions have to be more than 50% to blame for the loss for the claim to be labeled as at-fault on the final record. Depending on how the claim was processed, though, any accident processed by your insurance company could affect your record. So even if it’s completely someone else’s fault (like someone rear ending you), keep this in mind before you get your insurance company involved. They may or may not raise your rates. If you decide to change companies, any new company might not see a difference when quoting insurance policies.
You’ll be able to tell if the claim will be considered when your renewal is run because the agent will refer to it as chargeable. Chargeable claims are claims that lead to a surcharge on your renewal policy or your new policy if you switch carriers.
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How long do chargeable claims impact your car insurance rates?
If you recently had a chargeable loss, you’ll see the surcharge on your policy only after the company runs your renewal. Some big name companies only look at accidents for three years after they happen. Others will ask for data going back as far as five years. Unfortunately, once an accident is on your record, you’ll generally have to wait for it to fall off with time.
If you’re looking for insurance and you see an accident on your record that wasn’t yours, always appeal it. Depending on the situation, you may also want to have it investigated further as it could be a sign of identity theft. In these types of instances, you would want law enforcement involved to address criminal activities. Once you have a claim in process, the insurance adjuster is only there to value the damage and accident. Your auto insurance company will generally not do further research unless you start the appeals process.
Can non-fault claims be used to determine your rates?
If you didn’t contribute to the loss, you don’t have to worry about a single non-fault claim affecting your records. Even though a not-at-fault accident won’t be used against you at your renewal, it’s possible that multiple events can. More importantly, if it’s not documented properly, it could be recorded as being your fault. With something like a car that hits you from behind, it may seem obvious. The burden of proof often falls on the drivers involved. It’s up to you to protect your driving record just as you would your financial records.
What if it is recorded as non-fault? Many companies will only look at your non-fault losses if you have three or more within three years.
While each of the losses won’t be surcharged, the carrier will place applicants who have several incidents into a standard or high-risk class instead of a preferred one. This could raise your premiums if you would have been eligible for preferred rates.
How are auto insurance claims reported to other carriers?
When a claim is reported it must be investigated. The claim details will stay in your file as long as the claim is open. After it’s settled and the claim designation reads closed, the details will be stored differently. At this time, the carrier will transfer the file information to a record that more than just the carrier can access. (For more information, read our “How long can my car insurance claim stay open?“).
Claims records are stored in third-party databases like the Claims Loss Underwriting Exchange that is run by LexisNexis.
This is an electronic database that all insurance companies have access to when underwriting an application.
It’s used as an information center so that insurers can make informed rate decisions. Some of the details included in your C.L.U.E. report will include:
- Name
- Date of birth
- Policy number
- Claim number
- Claim details
- Fault determination
- Claim payout
- Date of loss
- Vehicle information
Read more: How long do you have to transfer car insurance?
How long will these claims records be found on your personal claims report?
Insurance companies don’t have the storage capabilities to keep 100% of the claims information in their own files forever.
Once the information is transported to a C.L.U.E. record, some of the information is removed from the company’s system. If the carrier suspects fraud or future litigation, the records may be kept by their legal department for a longer period of time.
Once information is transferred to the driver’s personal insurance report, the LexisNexis system will store the data for up to seven years. After seven years is up, the claim can’t be disputed and it also can’t affect your insurance any longer so there’s no need to hold onto the information.
You should always be upfront with insurers if you’re applying for coverage.
If you know you’ve had a loss in the past, disclose the information as you get a quote. You can see how a claim affects your rates easily if you compare rates by getting online auto quotes. Plug in your personal information, enter the claim details and then see how your rates change.
Read more: How to Appeal Decisions Made by Car Insurance Companies
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