Insurance can be a tricky one. Yes, you have it in place but is it wise to claim on it in every situation? Making a claim can cause your insurance price to rise so there are in fact some situations where it is best not to claim, whereas others where it will be necessary.
What is a claim?
If you are involved in a road accident, something is stolen from your vehicle or your vehicle is damaged for a variety of reasons, you are entitled to make a claim on your insurance. Your insurer will help you pay towards any necessary replacements, damages or repairs. By paying for Fleet Insurance each year through our website, for example, you are covered for these things.
It is true that if you were to get involved in a car accident, it is likely that the costs could potentially be in the thousands to pay for legal fees, repairs, medical fees and maybe even the loss of income. Therefore, having insurance in place in the first place, you are able to pay a fee each month or annually, depending on the policy, to help cover yourself if you were ever in this position. Of course, it is also a legal requirement to have car insurance in place before you are able to drive your car at all (unless it is on private land owned by you).
What to consider
You will need to think out the likelihood of your claim actually turning out to be successful, which will ultimately depend on the terms and conditions of your policy. Make sure you read these carefully before you take out a policy and again when you are wondering whether you should make a claim at all should it come to it.
If you only have the minimum requirement of third party car insurance, this will only cover you for the damage which is done to another vehicle and/or the driver of said vehicle. However, you are not going to be covered for the damage or theft of your own car.
It is not only about the type of policy you have, it is also about the details. For example, the British Insurance Brokers’ Association has stated that one in three British drivers are not covered for accidentally putting the wrong type of fuel into their vehicle.
Furthermore, cover for driving another person’s car is not a typical feature of most insurance policies. Therefore, it is worth remembering that if it is part of your policy, that it is probably just third-party cover when driving another’s vehicle.
What about your excess?
As a rule, making a claim even as small as £500 on your car insurance will mean that your chances of renewal having a higher premium for the following year’s insurance policy are very likely indeed.
Before making a claim, you should consider whether your excess is higher than the value of your claim. If it is, you should attempt to settle the cost without having to claim on your insurance, as this will more than likely prove cheaper. For some, it may be the case that they need to take out a short term loan from a direct lender to get the money they need, quickly in order to pay for smaller repairs for their vehicle.
No claims bonus
You should also consider a no claims bonus. A no-claims bonus is proof a good driving record and therefore you will be viewed as less of a risk to future car insurance lenders. If you have this, when it comes to calculating your future policies, you can expect a discount of up to 60% with certain insurers. Of course, the discount will vary from provider to provider, so do your research. Moreover, making a claim with one insurer may have different repercussions when making a claim from a different one.
Some insurance policies include a no-claims bonus protection feature. This is where some car insurance companies will offer protection to people who typically have a good driving record and have gone four or more years without making a claim. This will allow the person to make a claim without losing their bonus.
Should I claim?
So, when deciding whether you should make a claim, the key is to do the maths. This will aid you in deciding whether it is worth making a rather low-value claim or not. You need to take into account not only the excess but also the amount you may be required to pay in extra premiums before your no-claims bonus would be fully restored.