Why reporting a minor crash to your car insurer even when you DON'T claim could cause your premium to soar

MAKING only one call to your car insurer to inform them of a minor scrape – even if you don't claim – can hike your premium.

Insurance firms are using a central database called the Claims and Underwriting Exchange (CUE) to trace incidents that don't normally appear on your history.

The database keeps calls on record for SIX years with a large number of customers phoning up every day to flag up incidents but never submitting a formal claim.

It pertains to car, home and private injury cover with travel cover due to be included to the list later this season.

CUE was set up to help prevent fraud to ensure customers were honest when giving a new insurer details about their past.

But insurers are actually increasingly using the database to create premiums and are taking into account the "notification only" reports to boost prices.

And policyholders are stuck in a "no-win" situation according to experts as clients are obliged to report any incidents that "can provide rise to some claim" even though you never pursue it further.

This could incorporate a minor auto parking scrape, a sluggish speed nose-to-tail bump or paint chips.

Martyn John, a GoCompare spokesman, told The Times: "Individuals are stuck inside a no-win situation when it comes to reporting incidents.

"On the one hand, insurers expects customers to report any incidents they have, but in so doing it's possible their insurer may see them as a higher risk and hike their premium at renewal regardless of whether they've actually designed a claim or otherwise."

Ashton West, chief executive of the Car insurance policy Bureau, which manages the CUE, added: “What insurers do with that detail, and how they underwrite confirmed risk depends upon their individual underwriting rules and rating engines.”

Premiums have previously surged over the last year by lb90 with drivers hit hardest within the North East because of increases of Insurance Premium Tax and law changes on personal injury payouts.