Insurance pricing depends heavily on a driver's past, and that past is not taken on trust. Shared industry databases mean the record follows a person between insurers regardless of where a policy is bought.
What is actually recorded
Claims databases hold incidents reported to any participating insurer, including the date, the vehicle, the type of claim and the amount paid.
Incidents reported but never pursued are recorded as well, which is why an accident that resulted in no payment can still appear.
The record attaches to the individual and to the vehicle, so both can be checked independently of what an applicant states.
Why no-claims history is valuable
Years of insurance without a claim earn a discount that grows with each additional year, up to a maximum after which it stops increasing.
The discount exists because past claim behaviour is one of the better available predictors of future claim behaviour.
It is held against a person rather than a car, but it can normally only be applied to one policy at a time, which affects households running several vehicles.
What a claim does to it
A claim usually reduces accumulated years by a set number rather than removing them entirely, and the reduction applies at the next renewal.
Protecting the discount is offered as an option, which limits how many claims can be made before the entitlement is affected.
Protection does not prevent the underlying premium rising, since the base price is recalculated from a record that now contains a claim.
Why fault matters less than expected
A claim where the insurer recovers its costs from another party's insurer affects the record differently from one where it does not.
Where fault cannot be established or the other party is untraced, the insurer bears the cost, and the claim counts against the policyholder despite no wrongdoing.
This is why an incident that was not a driver's fault can still change their price, and why the outcome depends on recovery rather than on blame.
What non-disclosure risks
Because the history is already visible to insurers, an applicant who omits an incident is providing information that can be checked immediately.
Inconsistency between a declaration and the record can lead to a policy being cancelled or a claim being reduced, which is a far worse outcome than a higher premium.
Declaring everything and letting the insurer apply its own rules is therefore the only approach that leaves the cover intact when it is needed.