A client was recently rear ended. Both the striking vehicle and her vehicle had significant property damage. She immediately felt neck and back pain but was reluctant to receive treatment for fear that her auto insurance rates would rise. Were her fears just?
In my experience, drivers may be so worried that their insurance rates will rise that they don’t file a claim or even notify their car insurance company of an incident. Is this fear justified?
There are essentially four factors that help determine whether an insurance claim will increase car insurance rates:
- Were you at fault? If you are at fault for the incident giving rise to the claim, you can be assured your rates will rise unless you have a policy that provides accident forgiveness.
- Your driving history matters. If you are a safe driver that hasn’t received a ticket or been involved in a motor vehicle accident in many, many years, a minor fender bender even if you are fault, may not impact your rates at all. Rates rise when an insurance company considers a driver to be a higher risk. A driver with decades of safe driving experience doesn’t necessarily become high risk after a little fender bender.
- How long have you been with your insurance company? Car insurance companies appreciate customers who have stayed with them for a long time. If you have been with your insurance company for a long time with a clean record, you may not see any increase after a minor incident.
- The severity of the incident. The more severe the incident, the more likely your rates with rise, unless, you are not at fault for the incident in the first place.
The vast majority of consumer insurance claims are recorded in one or both of two data bases: CLUE and A-PLUS.
CLUE, the larger and better known data base, stands for Comprehensive Loss Underwriting Exchange. These reports are referred to as CLUE reports. CLUE reports include information such as name, address and policy number and claim information such as date of loss, type of loss and amounts paid.
Homeowners and auto claims are registered in CLUE and A-PLUS reports. Insurers may rely on these data bases to research and screen applicants’ claim histories, which in some cases, can result in higher rates or difficulty even obtaining coverage.
When you make a claim to your insurance carrier, ask the company representative to produce your CLUE report. If your rates rise after making a claim, make sure to get a written explanation why. You may be able to use some of the points in this blog to argue that the rates should not be increased or that any increase be rescinded.