Is it worth making a claim on car insurance?

What are the pros and cons of making a car insurance claim?  

There are many benefits and downsides to making a car insurance claim. Your individual circumstances will ultimately determine what the best action to take is, as well as your insurance policy. Some pros to consider are: 

More affordable if substantial damage has been caused  

If the damage costs more to repair than the value of your premium, it may be worth making a claim. This is simply because it will save you money on the repairs, especially if the damage is substantial anyway. 

Potential pay-out towards a new car if yours has been written off  

Your car insurance policy may state that the insurer will contribute towards the cost of a new car – if yours is written off. Under these circumstances, it’s definitely a good idea to claim and save yourself some money. Even if your insurance goes up, you’ll probably still be better of financially.  

Access to a courtesy car  

Again, your insurer might provide you with access to a courtesy car while yours is getting fixed or while you shop around for a new one. You’d need to claim in order to benefit from this. 

Reassurance that it is being dealt with properly  

It can be stressful dealing with car repairs on your own, especially if you’ve been in a bad accident or its your first time having to make repairs. The insurer will be able to offer you advice and reassure you that the situation is being dealt with. 

Cons of making a car insurance claim: 

Make sure you also consider the cons of making a car insurance claim, so that you make a well-informed decision. Some cons you should know about include:

Potentially losing your no-claims bonus  

If you have a no-claims bonus, you risk losing it by making a claim. Work out whether it would be more cost-effective to pay for the damage yourself, or to make the claim and lose that no claims bonus. This also depends on whether the incident was a ‘no-fault’ accident or not, combined with your company policy. If you’ve protected your no claims bonus, the number of years that contribute to it shouldn’t be affected by you making a claim.  

Having your excess deducted from any pay-out you receive  

If you’re entitled to a payout from your insurer, it’s likely that any excess you’ve agreed to pay will be deducted from this amount. In some cases, you could end up being paid relatively little from your insurer and your insurance getting considerably more expensive as a result of your claim. If this is the likely outcome, then you may want to consider not claiming. 

Your insurance going up  

Insurers calculate the cost of your insurance based on various statistics. These include risk factors, like how many claims you’ve made previously and how many accidents you’ve been in – whether you’ve claimed or not. It’s also worth noting that you should tell your insurer about the accident anyway. Otherwise, your policy could become void.  

Being added to the motor insurance database  

When you claim on the insurance, even if it wasn’t your fault, the incident is reported on the motor insurance database. This gives insurers an indication of how risky you are. So, your insurance could go up even if you weren’t at fault, if your driving history suggests that you’re a high-risk driver.  

How else can I reduce my car insurance rates?  

In some cases, going through the car insurance claims process with your insurer may be unavoidable. However, there are other things you can do to help bring your insurance down:  

Opt for multi-car insurance 

Multi-car discounts can help to bring your premium down. This is basically where you insure multiple cars on the same policy. For example, yours and your partner’s, children’s or parents’ cars. 

Take a Pass Plus course  

A Pass Plus course is a short, six-hour course that helps inexperienced and unconfident drivers improve their driving skills. There isn’t a test, but you have to reach the required standard by the end of each module in order to pass. You have to pay for it, but it can knock a significant amount of money off your insurance. 

Go for black box insurance 

Black box insurance uses GPS technology to measure how you drive and can be cheaper than traditional car insurance. Once your driving has been assessed, the provider may reduce your insurance. However, they aren’t cost effective for unsafe drivers, so bear this in mind.

[Pull quote] There are plenty of other ways you can reduce your car insurance rates, so it’s worth taking the time to do as many of these as you can. [Pull quote] 

What is a fault claim?  

There are two types of car insurance claims: 

• fault claim  
• non-fault claim  

A fault claim doesn’t necessarily mean that you’re to blame for the accident. There are three instances where your insurer will file your claim as a fault claim: 

1. something you did caused the accident 
2. someone who was driving your car caused the accident  
3. there wasn’t enough evidence to point towards somebody else as the culprit  

For example, your car could be parked outside your house in the dead of night and somebody vandalised it. If they were never caught, your insurer might put the claim down as a fault claim. 

With a fault claim, your insurance company will be paying out for most of the damages caused by the accident.  

Does a non-fault claim affect insurance?  

A non-fault claim is where the accident is proven to be somebody else’s fault. Their insurance will pay out for most of the costs. 

Your insurance is less likely to go up (or by a lower amount) with a non-fault claim. That being said, insurers calculate how risky you are as a driver on a variety of factors. Some insurers take into account the number of claims you’ve made, whether they were fault or non-fault. It really depends on your insurer. So, if your insurance goes up by a lot after your claim, it may be worth shopping around for a new provider.