01707 375914
9 Mundells Court, Welwyn Garden City, Herts, AL7 1EN
The True Cost of Making a Claim
Car insurance is a complicated industry, that’s why a lot of our customers come to us asking for advice. Many are wary of making a claim, because they are worried that they will lose some no claims discount (NCD) or see a premium increase at renewal.
That is probably true – unless you have opted for a protected no claims discount, then making a claim will typically reduce your NCD by 2 years. That means, if your premium is based on 8 years claim free driving, an accident will reduce that to 6 years, and so the discount applied will change when you renew your policy.
Also at renewal, your insurance company will assess the risk of you being involved in an accident and adjust your premium accordingly. They do this whether you have had a claim or not, as their underwriters constantly adjust their risk profiles.
Apparently, having an accident makes you more likely to have another accident, even if it wasn’t your fault, so it’s likely your premium will increase.
Bear in mind though, that you have to inform your insurer about any accident you are involved in, even if you don’t make a claim. So, your premium will go up anyway. It’s important to be aware that failing to inform your insurer means you are technically in breach of contract, so could find yourself uninsured should you need make another claim later.
How much does it cost to claim?
The first thing you will need to pay is any policy excess you have. This varies, depending if you opted for voluntary excesses when you took out the policy, but the average we see is around £300.
According to the Association of British Insurers, the average car insurance premium in the UK was £436 in 2022. If you inform your insurer but don’t claim, expect an increase of around 15%. If you do claim, the typical premium increase is 20% – 50%, depending whose fault the accident was (only if you stay with your current insurer). You will almost certainly get a lower quote by shopping around.
So, worst way, the total cost of making a claim is likely to be less than £500.
Should you claim?
Well, obviously if the repair cost is less than £500 it’s not worth claiming. However, modern cars have a lot of safety sensors, radars and cameras etc. that checking and calibrating. Which is why the average repair cost in the UK is now over £3000. How much more than the £500 cost to claim you are willing to spend is up to you. All we can say is that the true cost of making a claim is much lower than you think.
------
References
https://www.cityam.com/insurers-are-undervaluing-policy-holders-cars-fca-warns/
Graphical user interface
Description automatically generated with low confidence
https://www.moneyexpert.com/car-insurance/ask-an-expert/how-much-will-my-car-insurance-go-up-after-a-claim/#:~:text=If%20you%20have%20claimed%20on,and%20your%20overall%20driving%20record
https://www.comparethemarket.com/car-insurance/content/no-claims-discount/
