Why Auto Insurers Review Your Claims History

Mar 14, 2019


Why Auto Insurers Review Your Claims History

How do your past claims affect your future auto insurance rates?

When applying for new auto insurance in Lancaster, California, the insurer will consider different factors before determining your rate.  One of the things that they will pay particular attention to is your claims history.  But why exactly do your old claims affect your current insurance cost?  Here's what you need to know.

How do claims affect my auto insurance rates?

Auto insurers use your claims history to determine if you are a high or low-risk driver.  If you have a track record of making a lot of claims, then insurers will consider you riskier to insure.  As always, the higher risk you are, the higher your insurance rates will be.  On a positive note, if you are a safe driver, then your auto insurance rates will be on the lower side.

How does my insurer know about my past claims?

Auto insurers will track claims from different carriers with a CLUE ("Comprehensive Loss Underwriting Exchange") report.  CLUE is a database that all insurers use to track and review your claims history.  All insurers file monthly reports to the database regarding their clients' claims status.  These reports remain in the system for 7 years before they are deleted.  Before offering you coverage, all auto insurers will check your CLUE report to determine how high-risk you are.

Do comprehensive claims raise my rates too?

It's important to note that comprehensive damage claims will not affect your auto insurance premiums.  Because comprehensive claims are a result of things outside of your control, such as fire, storm damage, theft, and so on, insurers will not hold these claims against you.  It is only the claims for actual at-fault auto accidents that will affect your rates.

This is how your prior claims will affect your current and future car insurance rates.  Do you have further questions regarding your auto insurance in Lancaster, California?  If so, then contact the experts at John E. Peakes Insurance Agency for assistance today.