No one likes to report auto accidents to a prospective insurer. The insurance company will charge you higher premiums, or they may not cover you at all. However, this information is required when you apply for automobile insurance, and if you don’t report it, the insurance company will likely find out anyway, and could refuse to provide you coverage. Even if the omission was accidental, it could cost you, so it is in your best interest to report your complete driving history.

What You’re Required to Report

• All accidents, including those in which you were at fault, and those caused by other drivers

• Any claims you made to previous insurance companies

• Any infractions on your driving record.

Why Applicants Don’t Report Past Claims

According to some estimates, around 20 percent of personal and commercial insurance policyholders omit past accident information. But not every failure to report past claims is intentional. Many times applicants do think they can hide accidents, not realizing that most insurance companies check the records of every applicant. However, sometimes the applicant merely forgot previous accidents, particularly if they were minor or several years ago. The omission of information could also very well be the insurance company’s fault. For instance, the insurance agent may not have asked the right questions, and the applicant didn’t realize he or she needed to disclose this information.

Consequences of Not Reporting Past Claims

Even though applicants are asked to report their accident and insurance history, insurance companies usually double-check this information, and will find anything not disclosed. If they find an error, they may refuse to provide you with coverage. But failure to report also affects other drivers: If people with at-fault claims are being given lower rates based on that information, while drivers who disclose are given higher rates and will be at a disadvantage.

If You Realize You’ve Omitted Something

If you’ve already arranged auto insurance, and then remember a past claim you forgot to report, simply mention it to your agent. Sure, they may never find out, but coming clean at the beginning is better than hoping you can keep the information from them. If the insurance company finds out later that you withheld information, the consequences will be far worse than if you admit it up front. And even if the company does increase your premiums based on this new information, you will have preserved your relationship with your insurer and remain in good standing, which is worth much more than lowered rates.