Can Auto Insurance Companies Find Out About Previous Accidents if Not Reported?
Understanding How Insurers Gain Access to Your Driver's History
When shopping for auto insurance, you might wonder if the companies can discover your past at-fault accidents even if you don't mention them in your application. The answer is yes. Insurance companies have numerous ways to access your driving history, which can lead to complications if not disclosed. This article delves into the methods insurance companies use to uncover your past accidents.
Methods of Information Access
Insurance companies predominantly rely on three key sources to gather information about your driving history and past accidents:
Motor Vehicle Reports (MVR)
Motor Vehicle Reports, provided by the state motor vehicle departments, contain detailed information about your driving record, including any accidents, traffic violations, and claims. Your state's Department of Motor Vehicles (DMV) issues these reports, and while you may be able to obtain a free MVR for a fee, insurers can easily request one.
Comprehensive Loss Underwriting Exchange (CLUE) Reports
CLUE reports are even more comprehensive. These reports compile a timeline of your insurance claims, including accidents, regardless of whether you were at fault. Data is collected for up to seven years and can reveal a significant amount of information about your driving history and claims.
Background Checks
Insurance companies may also perform background checks that can uncover prior incidents. These checks can scrutinize various records, leading to a complete picture of your driving history and any previous accidents.
Consequences of Not Disclosing Previous Accidents
Failing to disclose a previous accident can lead to serious complications:
Denial of Coverage: If an insurance company discovers that you have not disclosed a previous accident, they may deny you coverage. Cancellation of Policy: In some cases, if they learn about an unreported accident after you've already signed a policy, they may cancel your insurance. Credit Score Impact: Failing to report an accident can lead to a negative credit score, as it is often reported to credit bureaus.It is crucial to be honest during the application process to avoid these complications.
A Personal Experience in Michigan
Let's take a look at a real-life example from Michigan. One individual, while shopping for homeowner's and vehicle insurance bundles, discovered that after a mere five-minute conversation with an insurance agent, the agent had access to their and their wife's driving records for the past ten years. This highlights the extensive access insurance companies have to your driving history.
How Insurance Companies Obtain Information
Insurance companies use two primary reports to obtain information about your driving record:
Motor Vehicle Report (MVR)
The MVR is a state-issued record that captures accidents and violations associated with you as a driver. This report typically covers 3 to 10 years of driving history, depending on the state. You can order a free copy of your MVR by visiting the DMV's website, which provides a useful listing of state DMV offices and MVR order sites.
Comprehensive Loss Underwriting Exchange (CLUE) Report
CLUE reports go beyond your driving record and include claim information involving you as a driver, others in your household, and any vehicles registered in your name or associated with your address. These reports compile data for up to seven years and can be ordered directly from Lexis-Nexis.
Conclusion and Advice
Given that insurance companies have the capability to access a detailed summary of your driving history and claims, it is advisable to be completely honest during the application process. Reporting previous accidents upfront can help you avoid complications down the road, ensuring that you receive the coverage you need and deserve.
For those looking to shop around for better rates, it is recommended to consider the age of your claims history. The further it is from the present, the less likely it is to impact your insurance rates.