How long does a claim stay on insurance?
Many drivers are reluctant to make claims to their insurance company because they will essentially be penalized with increased costs for years. However, drivers are required to notify their insurance company after an accident so that the claim process can begin.
The length of time that the insurance provider will consider a claim that was made on your policy depends on a number of factors, but drivers can generally expect the consequences to follow them for a few years on average.
The look back period for claims
A record of an insurance claim will stay on your policy for three to five years after an accident in most cases. However, this is only a general rule and the location where you live and drive will affect the length of time that the claim stays on your policy. There are databases available to all insurance companies that allow them to see records of claims and accidents. The most commonly used way that insurers obtain your history is through a Comprehensive Loss Underwriting Exchange, sometimes called a CLUE report, that follows a driver for their life. This particular report gives up to seven years of claims for property and auto insurance along with the amounts paid out. Companies will use this info to assess the risk associated with covering a driver when they calculate policy costs.
This look back period can range from three to ten years depending on the state, but most drivers should expect their provider to stay within the three to five year window. The surcharges generally do not take effect until your current policy expires and your renewal period begins.
Surcharges for accidents and claims
Within this period of a few years, it is likely that you will be surcharged. On average, drivers spend several hundred dollars more a year while an accident remains on their record. Other factors such as traffic tickets or criminal charges for offenses such as reckless driving or DUI can also remain on your record for a long time and affect your policy costs. Multiple accidents within a few years can also cause insurance costs to go way up, as more than one claim and incident will be considered for surcharges at the same time. In some cases, an insurance company can choose to cancel a driver’s coverage if they decide that the driver will be a huge risk based on serious crimes or multiple accidents.
Ways to avoid high costs and penalties
If rates seem too high or unfair with your current provider, there is always the option of switching to another insurance company. While all insurance companies are likely to charge you more after an accident, some may penalize you more heavily than others. Drivers can essentially switch coverage as often as they want to, as long as their vehicles remain covered. Most insurance companies will also provide you with a quote so you can see if the savings are significant enough to warrant a change.
Get help from a lawyer in your area
There are attorneys who are knowledgeable about the insurance process and how to file a lawsuit following an accident. USAttorneys.com provides a directory of lawyers that makes finding a professional who matches your needs easy.
