Question: A car titled in my name was totaled out. It was on my father’s insurance policy, and his insurer paid out the accident claim but now says I cannot continue under my father’s policy because I no longer live with him. When shopping for auto insurance, do I have to report the accident to my new insurance company since the policy was in my father’s name and it will be a different car that I’ll be insuring?
Answer: 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 don’t report the claim when applying for a policy it can cause problems when your new insurance company finds out about it (and they will).
When you apply for a new policy, the 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 insurer won’t find out about the totaling of your car and resulting claims. 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. (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.
The policy may have been under your father’s name, but you were the one in the accident and the car was titled in your name, so your name should appear on the CLUE report along with information on the type of loss and amount paid for the claim.
When the insurance company finds out about the accident, there are a few possible outcomes.
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 they had known upfront.
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.