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Car insurance claims can have an impact on your insurance premiums. In general, at-fault accidents and claims can raise your rates, while not-at-fault accidents may not have an effect. However, how long a claim stays on your insurance record and how it affects your premiums varies from province to province in Canada. Here’s a general overview:

  1. British Columbia (BC)
    • The Insurance Corporation of British Columbia (ICBC) typically considers claims for the last 10 years for premium calculation purposes.
  2. Alberta
    • Insurance claims typically stay on your record for about 6 to 7 years. However, some insurance companies might look back as far as 10 years.
  3. Saskatchewan
    • In Saskatchewan, most insurers will look at the past 6 years of your driving record when determining your premiums.
  4. Manitoba
    • Manitoba Public Insurance (MPI) typically considers at-fault claims for a period of 6 years when determining Driver Safety Ratings.
  5. Ontario
    • Most insurance companies in Ontario will consider at-fault accidents for a period of 6 years.
  6. Quebec
    • Claims usually stay on your record for around 6 years in Quebec.
  7. Newfoundland and Labrador
    • Insurers typically look at the last 6 to 7 years of your driving and claims history.
  8. Prince Edward Island (PEI)
    • In PEI, insurance companies might look at claims history from the last 6 to 7 years.
  9. Nova Scotia
    • Insurance claims usually stay on record for about 6 to 7 years.
  10. New Brunswick
  • In New Brunswick, the general timeframe is around 6 to 7 years for at-fault claims.
  1. Yukon, Northwest Territories, and Nunavut
  • The standard in these territories is typically 6 to 7 years, but individual insurance providers might have different practices.

Different Types of Car Insurance Claims

insurance claim

In Canada, there are various types of car insurance claims based on the nature of the incident and the coverage involved. Here are the most common types of car insurance claims:

  1. Collision Claim:
    • This covers damages to your vehicle resulting from a collision with another vehicle or object. It doesn’t matter who’s at fault; if you have collision coverage, your insurer will pay for the repairs, less your deductible.
  2. Comprehensive Claim:
    • This covers non-collision-related damages to your car, such as theft, vandalism, fire, or natural disasters (e.g., hail, flood). Like collision coverage, you’ll have a deductible.
  3. Third-Party Liability Claim:
    • If you’re found at fault in an accident, this coverage will pay for the other party’s bodily injuries and property damage. It is mandatory across Canada, but the minimum coverage amount varies by province or territory.
  4. Accident Benefits/Bodily Injury Claim:
    • Regardless of who’s at fault in an accident, this claim provides compensation for medical treatments, rehabilitation, funeral expenses, and loss of income due to disability. The specifics of this coverage can vary by province, especially in provinces with a no-fault insurance system.
  5. Uninsured Motorist Claim:
    • This is invoked if you’re in an accident caused by an uninsured driver or in a hit-and-run where the culprit isn’t identified. It covers your medical expenses and, in some cases, the damage to your car.
  6. Underinsured Motorist Claim:
    • This kicks in when the at-fault driver’s liability limits aren’t enough to cover the costs of an accident. It will cover the difference up to your policy’s limits.
  7. Direct Compensation-Property Damage (DC-PD) Claim:
    • This is available in some provinces, like Ontario. If another driver is at fault and both of you are insured with companies licensed in that province, your insurer will pay for the damages to your vehicle directly under the DC-PD coverage.
  8. Glass Claim:
    • This pertains to the repair or replacement of your vehicle’s windshield or windows due to cracks or breaks. Some insurers might waive the deductible for glass repairs, but replacing the windshield might require you to pay the deductible.
  9. All Perils Claim:
    • This combines both collision and comprehensive coverages. It protects against all types of losses, except for those explicitly excluded in your policy.
  10. Specified Perils Claim:
  • This covers only the perils that are explicitly listed in your policy, such as theft, fire, or certain natural disasters.

Should You File a Car Insurance Claim?

Deciding whether to file a car insurance claim can be a complex decision, depending on the situation and potential implications. Here are some factors to consider:

  1. Severity of Damage or Injury:
    • Minor Damage: If the damage is minimal and no one is injured, it might be more cost-effective to pay out-of-pocket, especially if the repair cost is close to or less than your deductible.
    • Major Damage or Injury: In cases of significant damage or if anyone is injured, it’s generally advisable to file a claim.
  2. Fault:
    • Your Fault: If you’re at fault, especially in a significant accident, you’ll likely need to file a claim. However, remember that your premiums could increase at renewal.
    • Not Your Fault: If the other driver is at fault, their insurance should cover the damages. However, you should still notify your insurer about the accident.
  3. Deductible vs. Repair Cost:
    • If the cost of repairs is only slightly more than your deductible, you might choose not to file a claim to avoid potential premium increases.
  4. Potential Premium Increase:
    • Filing a claim, especially if you’re at fault, can result in an increase in your insurance premiums. If you have accident forgiveness on your policy, your first at-fault accident might not result in a rate increase. Consider the long-term costs of higher premiums versus the immediate cost of out-of-pocket expenses.
  5. Claim History:
    • If you’ve filed several claims in the past, another claim might significantly raise your rates or even risk non-renewal by your insurer.
  6. No-Claim Discounts:
    • If you have a no-claim discount, filing a claim might lead to losing this discount.
  7. Policy Requirements:
    • Some insurance policies require you to report any accident, regardless of whether you intend to file a claim. Failing to report could be a breach of your policy terms.
  8. Uninsured or Underinsured Drivers:
    • If you’re in an accident with an uninsured or underinsured driver and you have the respective coverage, you’ll need to file a claim with your insurer.
  9. Legal Implications:
    • If there’s a possibility of legal action (e.g., due to injuries), it’s crucial to notify your insurance company immediately.
  10. Peace of Mind:
  • Sometimes, people file claims simply for peace of mind, knowing that damages or potential issues arising later are documented and covered.

In summary, deciding whether to file a car insurance claim depends on the specific circumstances of the accident, potential financial implications, and the terms of your insurance policy. If in doubt, it’s a good idea to consult with your insurance agent or broker to understand the potential implications of filing or not filing a claim.

Do insurance companies keep track of claims?

Yes, insurance companies do keep track of claims. Here’s how and why they do it:

  1. Internal Records: Every time you file a claim with your insurance company, they record the details of that claim in their internal database. This includes information about the nature of the claim, the amount paid out, and other relevant details.
  2. Claims History Reports:
    • In Canada, there’s the Automobile Property Loss Underwriting System (APLUS), which insurers use to access claim histories of potential clients.
    • In the United States, there’s the Comprehensive Loss Underwriting Exchange (CLUE), managed by LexisNexis. This database contains up to seven years of personal auto and personal property claims linked to an individual.
    • These systems allow insurers to see your claims history, even if the claims were with different insurance companies.
  3. Purpose of Tracking:
    • Risk Assessment: Your claims history gives insurers a sense of how risky you might be to insure. A history of multiple claims in a short period could suggest a higher risk, potentially resulting in higher premiums.
    • Fraud Detection: Tracking claims helps insurance companies identify and investigate potential fraudulent activity. Patterns that deviate from the norm, like frequent claims in a short period, might be red flags.
    • Rate Determination: Your claims history is one of the factors that can influence your insurance premiums. Those with fewer claims often get better rates than those with a more frequent claims history.
    • Underwriting Decisions: Insurers might decide not to renew a policy or decline a new application based on an individual’s claims history.
  4. Privacy and Access: While insurance companies can access your claims history, they generally need your permission to do so, especially during the application or renewal process. You also typically have the right to request a copy of your claims report to review it for accuracy.
  5. Duration: As mentioned, databases like CLUE keep claims data for several years, typically up to seven. However, the length of time an individual claim affects your insurance rates can vary based on the nature of the claim and the insurance company’s policies.

Can an insurance company drop you after one accident?

In Canada, insurance companies cannot arbitrarily drop a policyholder due to a single accident. However, there are circumstances under which an insurer may decide not to renew a policy, which can be influenced by an accident. Here’s what you should know:

  1. Regulation: Insurance is provincially regulated in Canada, so the rules governing insurance practices vary from one province to another. While the general principles are often similar, there can be differences in the specific regulations and protections for consumers.
  2. Non-renewal vs. Cancellation: There’s a distinction between non-renewal and cancellation.
    • Non-renewal is when an insurer decides not to continue coverage after the policy term expires. They must provide advance notice, and the reasons can range from multiple claims in a short period to a significant violation like impaired driving. A single accident, especially if it’s your first, is not typically a sole reason for non-renewal. However, it can influence the decision, especially if other risk factors are present.
    • Cancellation of a policy in the middle of its term is rare and typically only happens for severe reasons, such as non-payment of premiums or misrepresentation on the application.
  3. At-Fault vs. Not-At-Fault: Whether or not you were at fault in the accident can influence the insurer’s decision. A not-at-fault accident is less likely to affect your standing with your insurance company, whereas an at-fault accident can have more repercussions, especially if it suggests a pattern of risky behavior.
  4. Accident Forgiveness: Some insurance policies offer “accident forgiveness” as an endorsement. If you have this coverage, your first at-fault accident won’t result in a premium increase, offering some protection against rate hikes after a single incident.
  5. Other Factors: While one accident might not lead to non-renewal, it could be a factor when combined with other issues, such as multiple traffic violations, late payments, or other claims in a short period.
  6. Right to Explanation: If an insurer decides not to renew your policy, they typically must provide a reason. If you believe the decision is unfair, you can contact your provincial or territorial insurance regulatory body to understand your rights and potentially file a complaint.

Do insurance companies have a database?

Car Insurance Claim

Yes, insurance companies in Canada utilize databases to store and share information about insurance claims and policies. One of the main purposes of these databases is to help insurance companies assess risk, verify information, and prevent fraud. Here are some key points about these databases in Canada:

  1. Automobile Property Loss Underwriting System (APLUS):
    • APLUS is a database in Canada that tracks auto insurance claims. Insurers can use this database to access a potential client’s or an existing policyholder’s claims history. This helps them assess the risk associated with insuring an individual and set appropriate premiums.
  2. Claims History:
    • When you make a claim with any insurance company, it gets recorded in databases like APLUS. This record includes details like the date of the loss, type of claim, amounts paid out, and at-fault determination.
  3. Use in Underwriting:
    • Insurance companies rely on this shared database during the underwriting process to determine the insurability of an applicant. The claims history provides them with a clearer picture of the applicant’s risk profile.
  4. Fraud Prevention:
    • One of the reasons such databases exist is to prevent and detect insurance fraud. By maintaining a centralized database, it becomes harder for individuals to hide or misrepresent their claims history.
  5. Privacy and Access:
    • Access to these databases is regulated, and insurers typically need the consent of the individual (usually obtained during the application process) to access their specific claims history.
    • Individuals also have the right to request a copy of their claims history to ensure the accuracy of the recorded information.
  6. Other Databases:
    • Apart from claims databases, insurance companies also have their internal databases for policy administration, customer relationship management, billing, etc.
  7. Provincial Variations:
    • Insurance is provincially regulated in Canada, so there might be some differences in how databases are used or accessed across different provinces.

How many claims is too many?

The question of “how many claims is too many” can be somewhat subjective and varies depending on the insurance company, the type of insurance, the duration over which the claims are spread, and the nature of the claims. However, there are general considerations that can guide this question:

  1. Frequency vs. Severity:
    • A few minor claims over several years might not be viewed as problematic as multiple significant claims within a short timeframe.
  2. Type of Claim:
    • Comprehensive claims (like those for theft or weather damage) are generally viewed differently from at-fault collision claims. An insurance company might be more lenient with a driver who has a couple of comprehensive claims versus someone with multiple at-fault collisions.
  3. Insurance Type:
    • Home insurance may have different standards than auto insurance. For instance, water damage claims on a home insurance policy might be viewed more critically than minor collision claims on an auto policy.
  4. Duration:
    • A person with three claims in one year might be viewed differently than someone with three claims over ten years.
  5. Policy Terms:
    • Some insurance policies have conditions related to the number of claims within a specific period. Exceeding this number might lead to non-renewal or higher premiums.
  6. Insurance Company’s Tolerance:
    • Every insurance company has its risk tolerance levels and underwriting guidelines. One company might be more lenient with claims than another.
  7. Consequences of Multiple Claims:
    • Premium Increase: After filing a claim, especially an at-fault one, there’s a possibility that your insurance premiums will go up. Multiple claims can magnify this effect.
    • Policy Non-Renewal: If an insurer views a policyholder as high-risk due to multiple claims, they might decide not to renew the policy.
    • Difficulty Finding Coverage: Having numerous claims can make it harder to find an insurer willing to offer coverage, or the coverage might come at a significantly higher rate.
  8. Consider the Deductible:
    • If the cost of repair or replacement after an incident is close to or less than the deductible, it might be more economical to pay out-of-pocket than to file a claim, given the potential long-term increase in premiums.
  9. Accident Forgiveness:
    • Some insurers offer “accident forgiveness” as part of their policies, meaning your first at-fault accident won’t lead to an increase in premiums. However, this typically applies once, so multiple claims could still affect your rates.

Reducing the Claims Impact

If you’re concerned about the impact of claims on your insurance premiums or insurability, there are strategies and steps you can take to mitigate these effects. Here’s how to reduce the impact of claims on your insurance:

  1. Preventive Measures:
    • For home insurance, invest in home improvements that prevent damage, like better drainage, roof repairs, or upgraded security systems.
    • For auto insurance, consider defensive driving courses to improve your driving skills and reduce the chance of at-fault accidents.
  2. Increase Deductibles:
    • By opting for a higher deductible, you might reduce your premium. However, this means you’ll pay more out-of-pocket if you need to file a claim.
  3. Consider Paying Small Claims Out-of-Pocket:
    • If the damage or loss is minor and close to your deductible amount, it might make financial sense to handle the cost without involving the insurance company.
  4. Bundle Insurance Policies:
    • By bundling your auto and home insurance with the same provider, you might qualify for a discount, which could offset rate increases due to claims.
  5. Check for Discounts:
    • Ask your insurer about discounts for which you might be eligible, like loyalty discounts, multi-vehicle discounts, or discounts for security systems.
  6. Accident Forgiveness:
    • Some insurance companies offer an “accident forgiveness” feature, where your first at-fault accident won’t result in a premium increase. However, this typically is a one-time benefit.
  7. Maintain a Clean Record:
    • The longer you go without additional claims, the less impact previous claims will have on your premiums. Over time, the effect of past claims diminishes.
  8. Shop Around:
    • If your current insurer raises your rates after a claim, it might be worth shopping around to see if you can get a better deal elsewhere. Different companies have different risk assessments and premium calculations.
  9. Stay Loyal:
    • Some insurers might be more lenient on premium increases for long-term customers who’ve had few claims over the years.
  10. Consult Your Agent Before Filing:
  • If you’re unsure about the repercussions of filing a claim, consult with your insurance agent. They can provide insights into potential premium impacts and guide you on the best course of action.
  1. Good Credit:
  • In some regions, your credit score can influence your insurance rates. Maintaining good credit can potentially help mitigate the impact of claims on your premiums.
  1. Review Your Policy Regularly:
  • Sit down with your insurance broker or agent annually to review your coverages and see if any adjustments are needed. It’s an opportunity to ensure you have the right coverages and are not overpaying.

By proactively managing risks, maintaining open communication with your insurance provider, and reviewing your policy regularly, you can minimize the impact of claims on your insurance premiums and insurability.

Car Insurance Claims and Your Record FAQs

claim denied

  1. How long does a car insurance claim stay on your record in Canada?
    • Answer: In most provinces, insurance claims typically stay on your record for about 6 to 7 years. However, some insurance companies might look back as far as 10 years. The exact duration can vary depending on the province and the insurance provider.
  2. Does every claim affect your insurance premium?
    • Answer: Not necessarily. At-fault claims are more likely to result in a premium increase than not-at-fault claims. Factors like your overall driving record, the severity of the accident, and the amount of the claim can influence whether your premium changes.
  3. What is the difference between at-fault and not-at-fault claims?
    • Answer: An at-fault claim means you were deemed responsible for the accident, whereas a not-at-fault claim means the other party was responsible. Whether you’re at fault or not can affect your insurance premium.
  4. Can I be dropped by my insurance company after a claim?
    • Answer: It’s rare for an insurance company to cancel a policy in the middle of its term because of a single claim. However, they may choose not to renew your policy if you have multiple claims in a short period or for other significant reasons.
  5. Is it always advisable to file a claim after an accident?
    • Answer: Not always. If the damage is minor and the repair cost is close to or less than your deductible, it might be more cost-effective to handle the repair out-of-pocket rather than filing a claim and risking a premium increase.
  6. Do all insurance companies in Canada have access to my claims history?
    • Answer: Yes, through databases like APLUS, insurance companies can access your claims history. However, they typically require your consent, often obtained during the application process, to access this data.
  7. Can I access my insurance claims history?
    • Answer: Yes, you have the right to request a copy of your claims history from the insurance database to ensure the recorded information is accurate.
  8. What is accident forgiveness in the context of car insurance?
    • Answer: Accident forgiveness is an endorsement offered by some insurers where your first at-fault accident won’t lead to an increase in premiums. However, this typically applies once and may come with certain conditions.
  9. If I move to a different province, does my claims history follow me?
    • Answer: Yes, your claims history is associated with you, not your location. If you move to a different province, insurance companies can still access your past claims history.
  10. Can traffic violations affect my insurance premiums?
  • Answer: Yes, traffic violations, especially serious infractions like impaired driving, can significantly affect your insurance premiums and may be considered along with claims history when determining rates.
  1. Do all claims result in an increase in premiums?
  • Answer: No, not all claims will result in increased premiums. Factors such as the type of claim (e.g., comprehensive vs. collision), whether you were at fault, the amount paid out on the claim, and your previous claims history can all influence if and how much your premium might increase.
  1. How does a “no-fault” insurance system affect my claims?
  • Answer: In a “no-fault” system, like in Ontario and Quebec, your insurance company pays for your damages regardless of who was at fault in the accident. This can speed up the claims process, but it doesn’t necessarily mean you won’t see a premium increase if you were at fault.
  1. If I’m not satisfied with my insurance company’s claim decision, what can I do?
  • Answer: If you disagree with your insurance company’s decision, you can first try to resolve it by speaking with a company representative or a claims supervisor. If you’re still not satisfied, each province has an insurance regulatory body or ombudsman you can contact for further assistance or to file a complaint.
  1. Does the number of claims I make matter more than the claim amount?
  • Answer: Both the frequency and the severity (amount) of claims can impact your insurability and premiums. Multiple small claims might raise concerns about the frequency of incidents, while a single high-value claim could raise concerns about the severity of risk.
  1. Can I choose not to report an accident to my insurance company?
  • Answer: Technically, you can choose not to report minor accidents, especially if no other party is involved, and the damage is minimal. However, many insurance policies require that all accidents be reported, regardless of fault or severity. Not reporting could breach your policy terms.
  1. If another driver reports an accident and I don’t, what happens?
  • Answer: If another driver reports an accident to their insurer and you don’t, their insurance company may contact yours to confirm the details and determine liability. It’s generally a good idea to report any accident involving another party to ensure your side of the story is represented.
  1. How can I mitigate the impact of claims on my insurance record?
  • Answer: Maintaining a clean driving record, bundling insurance policies, increasing your deductible, and regularly reviewing your coverage are some ways to mitigate the impact. Additionally, taking advantage of discounts and features like accident forgiveness can also help.
  1. Are all types of car insurance claims treated the same way by insurance companies?
  • Answer: No, different types of claims, such as collision, comprehensive, and liability, are treated differently. For instance, an at-fault collision claim is more likely to impact your premiums than a comprehensive claim due to events like theft or natural disasters.

About the Author: Valerie D. Hahn

Valerie is an insurance editor, journalist, and business professional at RateLab. She has more than 15 years of experience in personal financial products. She strives to educate readers and ensure that they are properly protected.

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