How long do claims stay on insurance?
It happens from time to time – something happens and you need to make a claim. You're probably wondering what happens next. Will the price of your insurance go up, will the claim stay on your insurance record in the long term, and is there anything else you need to be aware of? We've got the answers below – read on to learn more.
How long do claims stay on your insurance record?
In the UK, insurance claims data is retained and managed by the Claims and Underwriting Exchange, or CUE. This is essentially a database that collects and collates information on insurance claims. The CUE will keep your insurance claim data on record for six years in total, and insurers can view this information when they make decisions on your policy details.
Bear in mind that some insurance providers may not immediately check the CUE database when you apply for coverage in the future. To streamline the process and avoid costly data administration and management processes, they may simply ask you to disclose any claims you have made on your insurance over a set time period – maybe five years. It is important that you are as truthful as possible and do not omit anything when you disclose any previous home or car insurance claims. Leaving out important details could invalidate your insurance coverage.
You have the right to view any information held by the CUE relating to you and your insurance claim history. The Motor Insurers' Bureau, or MIB, provides a Subject Access Request form, which you can use to gain access to relevant data. You can also rest assured that the CUE should comply with all GDPR regulations regarding data privacy, and will protect your information at all times – although remember that they are within their rights to share this data with registered insurance providers.
Disputing a claim made on your car insurance
This is where car and home insurance work a little differently. With car insurance, there may be instances in which it wasn't you that made the claim at all – instead, the claim was made by someone else. If you are involved in a collision, for example, and the other party believes you to be at fault, they may try to make a claim on your insurance to cover any damages. This is only going to be the case with car insurance – it doesn't really apply to home insurance.
So what if you believe you weren't at fault and the claim made against you is false? Well, you'll probably want to dispute the claim.
You may decide to speak to your insurance provider and let them know that you do not agree with the decision. They should investigate further and seek proof of who was really to blame. The best possible outcome is that the other party's claim is rejected and their insurance provider has to cover the costs rather than yours. Even if this is not the outcome, you may be able to split some of the cost between you and the other party rather than bearing it all on your own insurance.
Is an insurance claim a big deal?
It can be a big deal, at least in some senses. The idea of insurance is to provide cover and a safety net just in case something bad happens. If that 'something bad' does happen, it's fine to make a claim, and this may end up better for your situation than covering damages and paying for repairs out of your own pocket.
But how much will your insurance go up after a claim? This depends on the insurance provider, as well as a number of other factors. For car insurance, premiums typically go up by between 20% and 50% [1] after a claim, but the increase may be greater in some cases – for example, accidents caused by dangerous driving. There is also the No Claims Bonus to bear in mind – you may end up losing this bonus. Home insurance premiums may also depend on a number of different aspects – for example, research suggests that homeowners who made a claim following flooding ended up paying more than double for their home insurance premiums. Again, it's up to the individual insurance provider to decide on this.
Bear in mind that there are other factors involved here, and your insurance provider may take these into account when they decide how much to add to your premium. For cars, this could include your age, the type of car you are driving, the job you do, your location, and other aspects. For home insurance, the location of your property may play a part – is it prone to flooding or burglary, for example – as well as the value of the property's contents and your use of security features like alarms and locking systems. As a general rule of thumb, though, making a claim is going to add quite a bit to your premium each year. This is why insurance is probably best approached as a last resort to protect you in case an expensive accident or event occurs.
Weighing up your options
If you do find yourself needing to make a claim, it's a good idea to consider your options. For instance, it may be worth bearing in mind your No Claims Bonus, if you have one, and factoring in the additional premium cost each year before you decide whether or not to claim on your insurance coverage. It's also worth thinking about your insurance excess. When you make a claim on your insurance, you'll need to pay a fee to do so, known as your excess. This will vary between different insurance providers, and is often something you can choose yourself, but it could be £100, £150, or more.
With all this information, you can make an informed decision. Will it be more cost-effective for you simply to cover the damage yourself, or does it work out cheaper to use your insurance?
[1] https://www.moneyexpert.com/car-insurance/ask-an-expert/how-much-will-my-car-insurance-go-up-after-a-claim/
Urban Jungle is not a financial advisor and information in this article should not be taken as advice or recommendation.
