Car insurance is one of those unique products that you buy, and you don’t ever want to use it. Since the financial contract is only designed to really benefit you after you experience an accident or another type of catastrophic event, it’s a product that you file away and hope not to use for the entire life of the policy.
If you do have to file a claim, how long do car insurance claims stay on your record? Since claims can affect your driving record and insurance rates for around three years, it’s best to educate yourself before you call your insurer.
Unfortunately, no matter how careful you are and how little you drive, it’s always possible to get into an accident. Statistics show that more than half of the accidents reported to insurance companies happen within five miles of the driver’s home.
If you have an accident, it’s important to assess whether or not it’s worth it to file a claim.
If you do have to file a claim, you can compare car insurance quotes to make sure you get the best deal. Enter your ZIP above to compare car insurance rates after a claim.
How A Claim Will Impact a Driver’s Rates
Not all car insurance claims will have a negative effect on your policy. Claims filed against someone else’s insurance are classified as not-at-fault accidents. While these claims will still be reported on your claims record, they don’t come with a surcharge and a single incident won’t change your risk class.
If you’re at-fault in the loss, your policy will have a surcharge at your next renewal and you could fall into a higher-cost risk class.
If you were not to blame for the loss but had to make a claim against your insurance, you shouldn’t have to worry about the claim being chargeable on your next renewal.
How long will an insurance claim raise your rates?
If you have a chargeable claim on your record, that claim could hold you back from getting the best rates for as long as 3 years. In most states, a company can only legally surcharge a claim on a driver’s record for up to 36 months after the claim is closed.
Let’s look at just how much insurance goes up after a car accident or speeding ticket.
|Companies||Average Annual Rates with a Clean Record||Average Annual Rates with One Accident||Average Annual Rates with One DUI||Average Annual Rates with One Speeding Violation|
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Just on accident can raise your rates an average of $81 a month, and one speeding ticket can cost you an extra $45 per month.
If you have more than one loss or a combination of traffic infractions and accidents, the claims record could impact you for longer than you expected.
For example, how long an accident stays on your record in Texas or California is different. In Texas, accidents drop off in three years. In California, most accidents drop off in three years, but more serious infractions like DUIs can stay for as long as 10 years. Also, only two years is how long a car accident stays on your insurance record in Michigan.
Car insurance companies only charge you for the violations while they are on your record. For example, three years is how long an accident stays on your insurance with Progressive, unless your state says differently.
It could take several years for you to regain discounts and to climb out of a high-risk driver classification because you’ll have to wait for multiple blemishes to fall off of your record.
How long does a car accident stay on your insurance record?
As you can imagine, insurance companies have to take and investigated hundreds of thousands of claims every year when they have a large book of business. Storing information in the insurer’s limited database forever isn’t realistic.
Just how long do car insurance companies keep records? Most companies will only keep basic information the claim after it’s been settled for a full 3 years.
How long do car insurance claims stay on your record?
Companies may not keep your claims record on your company-specific report for long, but all claims data is transferred to your universal claims record so that all insurance companies are able to access your file. Almost all insurers that sell personal policies will report the data to LexisNexis in your C.L.U.E. report.
C.L.U.E. stands for your Claims Loss Underwriting Exchange report. The database stores information that can be accessed by using a driver’s license number or name.
All insurers can see if drivers have at-fault claims, how much the insurer paid, and who was driving at the time of the loss.
How long does a car accident stay on your record for insurance? Records can be accessed for seven years.
The Difference Between A First-Party and A Third-Party Claim
There are two types of claims that you can file after an accident. You can either file a first-party claim or a third-party claim.
A first-party claim is a request for benefits by the policyholder against their own car insurance coverage. A third-party claim is a request for payout for medical bills or auto repairs against someone else’s insurance policy.
When can you file a first-party claim against your insurance?
You aren’t always eligible to file a claim for benefits under your own insurance. First, if you’re filing a first-party claim, you need to be sure that you have first-party coverage options.
Watch this video to learn what coverages are available.
In most states, first-party coverage that pays for the expenses that you incur after an accident isn’t required.
If you don’t have the right coverage and you have an at-fault loss, you’re on your own.
You need to verify that you have coverage before filing a claim. If you’ve suffered a loss to your vehicle and you need to get repairs done, you must have the appropriate physical damage coverage.
If you’re injured in an accident, you must have first-party medical benefit coverage options.
Here are the types of car insurance coverages to look for:
- Medical Payments Coverage
- Uninsured Motorist Protection
- Personal Injury Protection
According to AAA, most states require some sort of liability insurance coverage, but other coverages are not mandated. Most experts agree that just carrying the minimum coverage is not enough to handle most accidents.
When can you file a third-party claim against another driver’s policy?
If you’re not to blame for the loss and the other driver was insured and identified, you can file a third-party claim against their policy. In fact, when you call your insurer to file a claim and the claim is investigated, the adjuster will attempt to collect from the at-fault party’s coverage after fault is completely allocated.
Typically, any time you’re in an accident where you’re less than 49 percent at fault, you’ll be filing a claim for third-party benefits against a driver’s liability coverage.
According to NOLO, you can also file a third-party claim if you are a passenger in a vehicle that was not at fault in an accident.
Their bodily injury coverage will pay for your medical bills and their property damage coverage will pay for your vehicle repair. If you can’t identify the driver, you’ll file a first-party claim.
If you have a minor accident, it might not be worth it to file a claim. You’ll have to consider how much the claim will affect your rates over the next three years. Get online comparison quotes to estimate how much you’ll pay and then make an informed claim filing decision.
Since companies charge different rates for car insurance, compare quotes to find a company that won’t raise your rates too much for a claim. Enter your ZIP below to find cheap car insurance even if you’ve had accident claims!
Frequently Asked Questions About Claims and Car Insurance
Keep reading to find answers to some commonly asked questions about how claims affect insurance.
#1 – How long does it take for an accident to show up on your driving record?
Generally, accidents show up on your record pretty quickly. Car insurance companies will pull your driving record when you sign up or renew a policy.
#2 – How can I lower my car insurance after an accident?
You will want to do everything you can to reduce your car insurance rates after an accident. Several things you can do are ask for accident forgiveness, shop for new car insurance, increase your deductible, or take a driver’s class.
#3 – How long do homeowner insurance claims stay on your record?
Homeowner claims usually show up on your record for five to seven years. The number of claims on your record will affect your homeowner’s insurance just like your car insurance.
#4 – How long does an insurance claim stay on your record in Ontario?
Car insurance claims stay on your driver’s record in Canada for three years. Canada uses a system called Autoplus that keeps track of your driving record.