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How long do car insurance companies keep claim records?

Applying for car insurance involves a great many steps. Wise consumers shop for insurance the same way they should for any other purchase, carefully compare prices and features from company to company. The first thing to do is collect information about at least three insurance companies. Statistics say that it is possible to save up to 15 percent on your car insurance premiums through comparison-shopping.

Steps to Get Estimates of Cost for Auto Insurance

Step 1: Choose the companies you wish to approach – confirm with your state’s insurance department that each of them is licensed within your state.

Step 2: Determine the limits and types of insurance coverage that are required in your state, and assess the financial protection you need.

Step 3: Consider purchasing physical damage on your own automobile – comprehensive and collision can help you repair or replace your vehicle.

Step 4: Decide on a deductible that makes sense for you and your lender, if there is one.

Step 5: Complete an application using the same criteria for each company.

What Information Is Necessary for an Application?

When applying for car insurance, there is a lot of information needed to get an accurate quote. Make sure to be honest because they will find during the underwriting process. You are expected to answer the following questions:

Personal Information

  • Driver’s name, license number, date of birth, and marital status
  • Home address including city, state, ZIP code, and phone number
  • FAX number, if you have one
  • E-mail address
  • Vehicle garaging address including city, state, and ZIP code
  • Same information for each additional driver

Prior Insurance Coverage

  • How long you have had continuous insurance.
  • Prior insurance company’s name
  • Prior policy number and expiration date
  • Prior insurance claims with dates of occurrence

Insurance Limits

  • Desired liability limits – per vehicle and per accident. – Usually $50,000 per vehicle/100,000 per accident; $100,000 per vehicle/300,000 per accident; $250,000 per vehicle/500,000 per accident
  • Property Damage liability Limits: $50,000 up to 100,000 per vehicle
  • Comprehensive coverage deductible – From $250 to $1,000 per incident
  • Collision Deductible: From $250 to $1,000 per incident
  • Uninsured Motorists coverage – usually the same limits as you have on bodily injury liability

Vehicle Information

  • Vehicle year, make and model, license number
  • VIN number
  • Odometer reading
  • Annual mileage

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Cautions about Questions

There is a temptation to ‘fudge’ information in order to save money on insurance, but it is necessary to be careful not to do so because it can affect your insurance coverage resulting in a denied claim or revocation of your policy.

  • Report all drivers for the vehicle. It is a temptation to skip teen drivers and those with a great many traffic tickets. If this person is involved in an accident and not listed on your policy, coverage may be denied or the policy slated for cancellation.
  • List the actual parking address for your vehicles. A garage is safer, but if you park on the street, mention it so if the vehicle is damaged by a drive-by accident, the coverage is assured.
  • Report the mileage on the vehicle accurately. If you are involved in an accident, the mileage on the vehicle can reflect more usage than is expected.
  • Mention business travel because omitting that information can lead to a failure in coverage if you are involved in an accident while on business.
  • Be sure to tell about driving infractions because they will be discovered by the insurance company through DMV checks and this can lead to higher premiums.
  • Update your policy information when your life situation changes. A new job with a longer commute; adding another driver; or not reporting a minor accident can cause your premiums to increase or coverage to be denied.

How long do Insurance Companies Really Keep Data on Claims?

All insurance companies maintain a relationship with a database that keeps track of insurance claims. The most common database is called Comprehensive Loss Underwriting Exchange, or CLUE. Insurance companies’ claims department automatically enter class details into this database once a claim is completed. The company that hosts this database is called LexisNexis and is a valued information center on law for the legal community as well as the insurance industry.

This database and many others keep information on claims for seven years.

If the insurance company suspects fraud for one reason or another, the records are kept longer. Insurance companies are being more cautious about fraud because it is costing them — and you, as a policyholder, a great deal of money.

Choosing an Insurance Company

Since you have already determined that the insurance companies you are examining are licensed within your state, examine the financial health of the insurance companies. There are three common sources for information about the financial health of insurance companies:

Your state’s insurance department can give you an idea of how the insurance companies handle claims. Records are kept to allow you to see how the company handles claims. The NAIC also has that information in their records, sorted by insurance company.

Carefully consider as you purchase insurance because it is a large portion of a family’s budget. After you receive the estimates, or quotations, ask questions about discounts that particular insurance company may offer. Start comparing car insurance rates now by entering your zip code in our FREE tool below!

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