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Understanding how insurance companies find out about accident histories is valuable information when researching policies. In addition, simply knowing a few key acronyms and informative websites can provide quality information regarding how companies retrieve and use driver information.
Most likely, worrying about accident and insurance companies finding out is tied to worry about higher premiums. Even though it may be tempting to attempt to hide accidents from insurance companies, chances are they will find out eventually.
Past Accident Claims
One primary technique insurance companies use to find out about car accidents is by researching past claims made by you. If you are looking for a new insurance company or attempting to find out why your premium went up, knowing that insurance companies can and will identify past claims is important. All insurance companies share information, and they do this in a variety of ways.
Reporting accidents to your insurance company can raise your premium rates, but it is a better idea to report the information than risk not reporting and the company finding out later. If you do not report a claim and file one later, the company may find out. If that happens, you not only committed fraud, but you could also lose your insurance coverage and the claim may be denied.
Sometimes it is okay to not report an accident to your insurance company. If the damage in the accident is lower than the deductible on your policy, it may not be necessary to report the accident. Sometimes you can handle the damages between the other driver and yourself, without any headaches or problems.
Contrary to what most think, minor accidents and claim associated with minor accidents usually do not raise premiums that much. If a flurry of accident-related claims happens in a short time span though, that may raise rates. Usually, the premium rates do not change much.
If you are involved in an accident, you may lose quality discounts, like safe driver discounts, which could raise your monthly costs. Despite that fact, most insurance companies have minor accident forgiveness policies.
Remember, insurance companies occasionally overlook minor accidents and related claims. If you are dealing with something major like a DUI, you must report the accident immediately and accept the possibility of raised premium rates.
It is better to be forthright with insurance companies immediately than to let them find out on their own. If the latter happens, you might lose your insurance coverage altogether and be left to deal with damage-related costs by yourself.
Comprehensive Loss Underwriting Exchange
A database called the Comprehensive Loss Underwriting Exchange (CLUE) exists for insurance companies to share their information regarding clients and claims. If you report a claim to your insurance company, however minor it may be, the company will report that information to CLUE. Once registered in the database, any insurance company that contributes to the database can use CLUE to receive reports about potential clients or existing clients.
Your individual CLUE report includes vehicle information such as:
- Make, model, and year of your car
- Your date of birth
- Policy information
- What type of coverage you currently have
As you can see, the database holds a plethora of information for companies to use. If you have reported a claim regarding an accident and your insurance company subscribes to CLUE, you can bet that other insurance companies can retrieve the claim.
Once your information is uploaded to CLUE, it will remain active for at least 7 years. If you are concerned about your CLUE report, or merely wish to see your report, you can request it from LexisNexis, a company that deals in personal consumer data.
Automobile-Property Loss Underwriting Service
A-PLUS is another database in addition to CLUE that insurance companies can subscribe to, upload claims information to, and retrieve data from regarding potential clients. Both databases are designed to give insurance companies an idea of how high of a risk you would be to insure. Insurance Services Office, Inc. (ISO) handles the A-PLUS database.
Driver History Abstracts
For each state, you may also obtain a driver history abstract, or a comprehensive list detailing your driving record. This list contains information that is public record, like tickets and accidents reported. It does also contain personal information like social security numbers, but that information will never be released to the public. Because some of the information is public record, insurance companies can also obtain abstracts, which will reveal any past accidents that have been reported.
If you would like to receive a copy of your own driver history abstract, contact your local DMV. There may be a small fee for processing the abstract. The abstracts are also known as Motor Vehicle Reports or MVRs.
Other Driver’s Reports and Claims
Even if you do not file a claim regarding an accident, if the other party involved files a claim with their insurance company, your CLUE report and MVR could also be impacted. Just because you do not report the incident, does not mean it will not show up in a database somewhere. As this information is legal to obtain for insurance companies, the best bet would be to report claims and know that those claims will become public record for insurance companies.
In addition, other people involved in the accident may file claims against your policy. When you get into an accident, it is imperative to exchange car insurance information. Once that has happened, the other person can contact your insurance agency to file a claim against you.
Other parties involved in an accident may file claims with their own respective insurance companies. If that happens, it is very certain that that company will contact your insurance company to begin handling the claims and cross reference information on what happened. Once this happens, your insurance company will find out about the accident.
If not insurance information was exchanged after the accident occurred, that is not a guarantee that the other party did not retrieve information about you. They could have recorded your license plate number, given it to their insurance company, which would have resulted in a DMV scan of your plate number. Once this occurs, the other insurance company will find out who you are and contact your insurance company.
There are many ways insurance companies can find out about an accident, especially considering when other people are involved. Even if an accident occurs with only your vehicle, if another person was in the car at the time of the accident, they could also file a claim against you. Regardless of the possibility of higher premiums, it is always safer in the long run to report accidents to your insurance company.
Auto Repair Businesses
Another method insurance companies use to find out about accident histories is to contact auto repair companies. Similar to CLUE, auto repair businesses also have shared databases that they input information into, which insurance companies can access. If you have brought your vehicle in for repair work because of an accident, there is a chance that the repair shop reported the damages, thus giving the insurance company access to the information. Whether the repair costs were large or small, there will be a chance the garage reported the damages and the work done on the vehicle.
Some states even have passed laws requiring auto repair shops to report any work completed on vehicles. This can include VINs, details about the make and model of the vehicle, any mechanical parts repaired or replaced, and body damage repaired. Sometimes, a detailed description of the work that was performed on the vehicle is required.
Check with your local state website to find out policies regarding requirements for auto damage repair shops.
Some auto repair shops, in addition to filing with their own databases, will file information directly with CLUE. If this is the case, the auto repair work on your vehicle will also appear on your CLUE report.
In addition to MVRs, official police reports are considered public record, and insurance companies can also access that information. If you were in an accident, however minor it may have been, and a police officer was called to the site of the accident, you can be sure an accident report was filed. If this was the case, there is public record of the accident.
With the variety of different ways car insurance companies can find out about accidents, it would be responsible to simply report accidents to your insurance company immediately. It may raise your premium, but it may prevent insurance companies viewing you as a high-risk client.
Remember, your premium is mostly based on how risky providers view you. If you look like a person who would attempt to not report a past accident, it is likely the insurance company either will not provide coverage or give an incredibly high premium. Honesty, in this case, truly is the best policy.
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