Do insurers check previous claims?
The insurance underwriting process is all about assessing risk and your claims history plays a key role. Underwriters review past claims to predict the likelihood of future incidents, which directly impacts your insurance premium. A history of frequent or high-cost claims signals greater risk, often leading to higher premiums. On the flip side, a clean or minimal claims record can result in lower insurance rates and better policy terms.
By analysing claims history, insurers make informed decisions about risk acceptance and pricing. This process helps shape not only individual premiums but also broader insurance pricing strategies.
How long do insurers keep records of claims?
In the UK, insurers and brokers typically keep records of your claims and policies for around six years2, and some, like AXA, may hold them for up to ten years3. This helps make sure all the details are available if any questions or disputes arise about your cover, giving both businesses and insurers peace of mind. In practice, brokers and insurers handling business and personal insurance routinely follow these retention periods to meet regulatory and legal obligations under the Limitation Act 1980.
How does your claims history influence your insurance premium?
Whether it’s personal or commercial insurance, your claims history influences:
- Premium pricing
- Coverage eligibility
- Underwriting decisions
Key factors insurers evaluate:
- Frequency and severity of previous claims - Insurers pay close attention to how often claims have been made and their financial impact, as multiple or high-cost claims suggest a higher likelihood of future losses, which can push premiums up.
- Type of incidents (e.g. accidents, theft, liability) - Certain claims, such as professional indemnity or public liability, are considered higher risk than minor property or equipment claims, so their nature can have a bigger effect on your policy terms and pricing. A small property claim might be seen as less risky than a repeated liability claim.
- How recently the last claim was filed - A claim made in the past year or two may weigh more heavily in underwriting decisions than an older claim, since recent claims indicate current exposure and ongoing risk.
By understanding how claims history affects insurance premiums, you can make smarter coverage choices and potentially lower your insurance costs.
How to manage your claims history
Effectively managing your claims history is essential to minimising its impact on your insurance premiums. One of the best ways to do this is by reducing the number of claims you file. Even small, frequent claims can raise red flags for insurers, signalling higher risk and often leading to increased premium costs.
Staying proactive and preventing incidents before they happen is a smart strategy to protect your rates. For example, investing in external health and safety solutions can reduce the risk of harm to employees and the public and may decrease employers’ and public liability claims. Similarly, it’s important that your business implements robust cybersecurity measures to mitigate the risk of cyber-attacks that may result in claims on your cyber insurance policy. These are just an example of some of the measures you can take as a business to decrease the likelihood of having to make a claim.
Another important tip is to carefully consider whether minor incidents warrant filing a claim. Sometimes, it’s more cost-effective to handle small repairs or losses out of pocket rather than submitting a claim that could affect your future premiums. This cautious approach helps maintain a clean claims record.
Finally, keeping yourself informed about your insurance policy and renewal terms can provide a financial edge. Regularly reviewing your coverage allows you to spot opportunities to reduce risk and lower premiums. Working closely with your insurance broker to understand how your claims history impacts your rates can offer valuable guidance for smarter insurance decisions.