When you’re applying for new car insurance, or even renewing an existing policy, what are the rules about disclosing non-fault claims and minor accidents?
Firstly, let’s be clear what these terms mean:
- Non-fault claims are ones where you’ve made an insurance claim, but your insurance company has been able to reclaim all their costs from the person whose fault it was (or their insurer). This is different to a claim where you might not have been to blame, but your insurer hasn’t been able to recoup their outlay. You can learn more about this in our article, How is Fault Decided?
- A minor accident could be described as one where there was little or no apparent damage to your vehicle or anyone else’s property, and no claim was made by you or a third party at the time.
If you’ve been involved in incidents that fall into either of these scenarios, you might believe there’s no need to mention them on an application form, but as the case study below shows, that can prove to be a costly mistake.
What can happen if you don’t declare non-fault claims or minor accidents?
A case study:
Our customer had applied for car insurance online. They had a nice car in a higher insurance group, and with all the other risk factors taken into account, their quote came out at just over £1,600.
Problems arose, though, when our sales agent followed up with a phone call to check a few details and realised that our customer hadn’t declared all material information on their online application. Amongst other things, there were also three previously undisclosed non-fault claims.
We explained to our customer the importance of disclosing all relevant information. Unfortunately, the undeclared claims meant we had to recalculate the quote, which was now closer to £2,600 based on the new information!
Understandably, no one would be happy with that outcome, and our customer was no exception, but they were wrong not to tell us about the non-fault claims on their application.
If you fail to declare relevant information which your insurer later finds out about, it could lead to your policy being cancelled or voided. Our article, Would your car insurance application pass a lie detector test?, gives more information about this.
Cancelled or voided policies must also be declared on an insurance application if you’re asked about them. Unfortunately, it can be more expensive to get cover if you’re in this situation, and some insurers might not quote at all, so avoid it happening in the first place if you can.
Why do non-fault accidents and claims matter?
Insurance policies usually say in the small print that it’s your responsibility to inform them of any accident, however minor, even when a claim seems unlikely. This is because:
- Third parties may say they won’t make an insurance claim against you at the time, and then change their mind later on.
- You could change your own mind about making a claim if what seemed, at first, to be minor damage later turns out to be more costly to repair.
Your no claims discount wasn’t affected – do you still have to declare a non-fault claim?
Yes, even if a non-fault claim is settled successfully and your no claims discount wasn’t affected, you still have a duty of disclosure on any new insurance application if you’re asked. This is because:
- Every incident you’re involved in is assessed and rated, even if it wasn’t your fault.
- An insurer may decide that the circumstances that caused the claim are likely to happen again. This will affect their quote.
Do non-fault accidents affect the cost of insurance?
Telling your insurer about an accident that wasn’t your fault won’t necessarily affect your insurance, especially if no claim is made, but it’s not always the case. Depending on the circumstances, your insurance could cost a bit more.
For example, if your car is parked on the road outside your house, and it’s damaged by passing traffic, the insurer’s assessment might be that that stretch of road is more risky. If they anticipate that a similar incident is likely to occur again, your insurance quote could be higher.
Or perhaps another driver pulls out of a blind junction on your route to work and collides with you. It’s not your fault, but your insurer might believe that your every-day journeys are on a route with a higher risk of an accident.
Can insurance companies check previous claims?
Yes, they can check your claims history. The Claims and Underwriting Exchange (CUE) is a central database that holds around 34 million records relating to car, home, personal injury and travel claims, as well as incidents that are reported, but don’t give rise to a claim. Most insurers submit information to CUE, which is then held for six years.
Insurance companies use information on CUE to help them calculate premiums, so it’s very likely that they’ll check your application against data there. Another reason to be completely honest, and avoid a cancelled policy!
How to check your own claims history
It can be difficult to remember incidents that may have happened several years ago. You can find out what information CUE has about incidents you were involved in by going to the Motor Insurers’ Bureau website and submitting a request form. This is a free service.
Always provide your insurer with as much information as you can. You might think it’s not relevant, but it doesn’t hurt to be as up-front as you can.
If you are in the unfortunate position of having a policy cancelled for non-disclosure, Complete Cover Group are specialists at finding affordable insurance for drivers with previously cancelled policies.