New insurer should know about old accident

By April 04, 2013, 10:12:00 AM EDT

Question: My policy is coming up for renewal, and I always like to shop around a couple of places.  I had an accident in my SUV a few months ago, but I recently bought a new car. When I fill out quotes, do I count the accident despite that it was in a different car?   

Answer: Changing vehicles doesn't rid you of your accident or claims associated with that accident. The best-case scenario is that you will get car insurance quotes that aren't accurate and will be surprised when the bill arrives. The worst is that the insurance company will decide it doesn't want to keep you as a customer.

We agree it's always wise to comparison shop when making changes to your policy (adding a car, a driver, etc.) and around renewal time.  This way you can make sure you are getting the cheapest possible premium for the car insurance coverages you need.  When filling out car insurance quote forms for you new car, you will indeed need to report the accident you had in your SUV.

As you can imagine, if people could change cars to get free of a surcharge for having an accident, there would be a lot of people trading vehicles right after an accident.  Instead, accidents follow you around even if you have sold, traded or totaled the vehicle that was actually in the accident. 

If your state places accidents on your driving record , then the accident will be seen when a car insurance company pulls your motor vehicle record (MVR) to determine your final premium amount. 

If the accident isn't placed on your MVR, claims paid out for damage to the SUV, or damages you caused others, will still be on your claims history ( C.L.U.E. report ) - another document that insurers obtain before finalizing your rate quote.

They don't take your word for it

It's hard to get around being honest to auto insurance providers about previous accidents without being found out since they do verify the information you give to them during the quoting process.

If the verification is done before you purchase the policy, then the rate quote will be updated and revised if the new information the car insurance company discovers is found to have changed your rate. If the information were verified after you purchased your policy, then you would receive an additional premium notice that would explain if you didn't pay an extra cost, the policy would cancel out.

It's even possible that the information you left out would be enough for your selected insurance company to no longer want to offer you a policy, and you'd need to look elsewhere for car insurance coverage.

When shopping around and filling out quote forms for auto insurance, it's important to give accurate information.  If you skip over information on an accident, traffic ticket or claims, then the quote you receive back will be incorrect.  That means the cheapest quote may not be so cheap after all of your correct information is known, and thus you'd need to go through the whole quoting process again.

Save yourself time; fill out the forms correctly the first time.  Asking questions of an auto insurer (many have agents waiting to chat online, or for you to call on the phone) while filling out the form can help you make sure the rate you get is the rate you will pay because you're the car insurance carrier won't be surprised when they verify your information. 

Typically, an at-fault accident would result in you being surcharged (receiving higher rates) for the next three to five years (depending upon state laws and the individual insurers' rating system).   It's possible, though, if this were a minor fender-bender that some auto insurers wouldn't rate you on it if the claims paid out were under a certain monetary amount.

Now that you know to include the accident when asked about previous incidents, it's time to start comparison shopping for the best car insurance rates.  You could save yourself hundreds, if not thousands in the process.  (See "3 ways to save big on car insurance")


This article appears in: Personal Finance , Insurance

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