Will My Insurance Premium Increase after Accident?
Across the UK people everyday claim on their car insurance for accidents, most of which are justified. However, can claiming on your insurance just cost you more money in the long run? In some cases, yes.
A common accident is parking over a raised kerb that damages the underside of a car or the kerb scratches the lower side part near the door. This is reported as a common accident across East London. Another common accident is clipping a wing mirror on a wall or beside another vehicle.
So surely such minor accidents aren’t worth claiming? Many would say opinion is subjective as it depends on the severity of the damage.
Yet after all, is that what ‘insurance’ is for, to allow you to claim? Many people would argue that they have paid insurance companies for motor insurance for many years, decades in some cases and never made a claim. Is it your prerogative to claim for an accident no matter what the cause or issue is?
Perhaps one problem is firstly, the cost of the excess on a policy. A person’s excess can be anything from £100 to £500. You’ve got to pay this. Secondly, and perhaps the one that irritates many claimants is the loss of a no-claims bonus you may or may not have built up over the years.
Therefore, the next time you come to renew your vehicle cover means your insurance premium will be higher.
Ignoring the no-claims bonus, if you haven’t got one makes no difference. The fact you’ve made a claim will affect the price of cover.
The liability Question?
There is a financial cost to you if an accident isn’t your fault and the vehicle is damaged by another motorist. Even if they admit liability, you will pay. You might think it’s straight forward that YOUR insurer can claim on the other motorist’s insurance without any cost to you. However, innocent motorists still face premium increases because of an accident. An accident not necessarily their fault.
Much of this depends on which insurance you pay for your premium. Unfortunately, simply being involved in an accident, even if it was not your fault, can cost you money. An insurer might simply think you are at a higher risk. It’s a bit like social engineering – increase your premium, make sure you know it and you’ll drive more carefully, therefore reducing the risk to you and the vehicle.
So just a couple of hundred pounds or so of damage to your vehicle, considered minor damage, you might be better off not claiming at all. Considered the cost and your options because paying for any repairs yourself sometimes may be a better course of action than making a low-value claim. Painful short term but you will gain long term.
According to research done by the AA, the impact of a claim can can last three or four years. So you should look at the increase in your insurance premium annually and multiply this approximate figure by three or four. That would give you a rough figure of how much claiming might cost you. Perhaps the hassle is not worth it and you’d be better off paying for the damage yourself?
It is a difficult case as everyone’s circumstances are different. You must consider your own options and take responsibility for making the financial decision yourself.
Make sure also you read your policy. Most policies generally advise that customers should report all accidents.
If you fail to report an accident and the insurer finds out, it could cancel a policy or refuse to pay out on a subsequent claim.