It is legal for the insurance agent to note the incident in your son's insurance file or CLUE report. Whether it is legal for his rates to be raised due to this reporting of an accident or incident that did not result in a claim being filed would depend upon state laws and the rates State Farm has filed with the state.

Your son can discuss this raise of rates and why an inquiry without a claim has affected him so much with his insurance agent to find out about the insurance companies rating system. He also could contact your state's insurance regulator to find out about his consumer rights and to make certain that his rates being raised was allowed per state insurance laws.

In general if you call in to your insurance company to inquire about or report an incident than whether you make a claim or not the insurance company is required to list any data reported to them by you, the insured, or by another party if it is in regards to their insured's policy. If a claim is filed, the insurance company is required to investigate the incident.

As a result of these basic insurance guidelines there is no way to notify an insurance company of an incident and not have it reported. An incident is an incident whether the insured elects to file a claim on the insurance policy or not as it still occurred and if reported will be listed in the loss data. Failure to do so could be considered unethical on the part of the insurance carrier as the incident was disclosed to the company.

Typically insurance companies and agencies will record and or document any communication they have with the insured for the protection of the insured’s interest.

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