Must you disclose an accident claim to a new car insurance company?
Yes, if you’ve been in an accident and had a claim paid out for your car, then you’ll need to inform any new car insurance company of this incident — even if you were on someone else’s auto insurance policy at the time.
When applying for your first car insurance policy, you need to disclose any previous accidents and claims. If you fail to report the claim when applying for a policy, it’s considered a material misrepresentation.
In a car insurance contract, a material misrepresentation occurs when the insured makes an untrue statement that: 1) is material to the acceptance of the risk; and 2) would have changed the rate at which insurance would have been provided or would have changed the insurer’s decision to issue the contract.
When you apply for a new policy, the auto insurance company will verify that the information you give is accurate by requesting various reports, including copies of your motor vehicle record (MVR) and property loss report.
If your state’s Department of Motor Vehicles places notations on your driving record for accidents, then your car insurance company will see the incident when they check MVR.
Even if the accident isn’t listed on your MVR, it doesn’t mean that your new insurance company won’t find out about an accident. When you make a claim after an accident, the insurance companies involved input the claims information into a property loss database called C.L.U.E., the Comprehensive Loss Underwriting Exchange.
This consumer report shows any new insurer information about all claims you filed under any previous insurance policy within the past seven years.
- Never lie on a car insurance application.
- Lying on an insurance application represents a material misrepresentation, and your insurer could cancel your policy.
- Old accidents appear on your motor vehicle record.
What happens if you lie about an accident when you get a new insurance policy?
If you had an accident and didn’t disclose that information to your new insurer, who finds out about it, there are several things that could happen.
The insurance provider might just recalculate your rates and send you a notice to pay an additional premium to keep your policy in force. Or you could receive a cancellation notice if the new information means you wouldn’t have been approved for coverage if the insurance company had known about it.
Giving correct information when shopping for car insurance is important because car insurance companies want a full picture of what type of risk you and your vehicle represent, and so that you can get accurate quotes and find the cheapest car insurance rates.
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