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Car insurance: is it always worth claiming?

Which? research reveals how much you can expect your premium to rise by

Car insurance: is it always worth claiming?

Which? has revealed the impact that car insurance claims could have on your future premiums.   

In an investigation for November’s edition of Which? Money, we compared the impact on a driver’s car insurance premium of seven different types of claim.

If you’re faced with several thousand pounds worth of damage or theft, the case for making a claim on your insurance will be pretty clear cut.

But when it comes to lower value losses – where it wouldn’t break the bank to fund repairs or replacements yourself – it’s worth considering the potential longer-term impact on your insurance before making a claim.

How might claiming affect your premium?

We gathered online quotes from five of the largest car insurers for a 33-year-old Ford Fiesta driver living in south London. With no recent incidents, the average annual premium quoted was £892.

Unsurprisingly, this figure increased when we added a claim from earlier this year. To simulate the effect a claim could continue to have further down the line, we changed the date of the incident, moving it back by one, then two, then three years.

The combined increases – which grew smaller the older the claim was – gave an impression of the overall amount our Fiesta driver might pay for their claim. The table below shows these total costs when claiming for seven different types of incident.

 Incident that leads to a claim Extra cost in premiums over 3 years % increase over 3 years’ premium
Collision with another car – policyholder’s fault £610 23%
Policyholder collides with their own wall. Minor damage and minor personal injury caused £530 20%
Items stolen from policyholder’s car £514 19%
Policyholder’s parked car is damaged by an untraceable third party £386 14%
Other driver hits policyholder’s car causing minor damage and minor personal injury £237 9%
Other driver hits policyholder’s car £158 6%
Damage to policyholder’s windscreen and/or windows £1 0%

*We obtained quotes from five major car insurers, comparing the initial average premium (£892) with the extra added to it if a claim, made in 2017, was reported. We then compared how much the claim added if the incident had occurred in 2016 or 2015. We combined those figures for an approximation of how much different types of claim could cost over three years, based on our scenario. Our policyholder is 33 years old, lives in south London in a three-bed terrace and drives a Ford Fiesta.

What else to consider before claiming

The excess

Excesses help to keep your premium low, marking a threshold of what you’re happy – or required – to cover yourself in the event of a claim.

In our survey of Which? members, conducted as part of the investigation, the excess was often cited as the reason for forgoing a claim.

Even where the value of the claim was higher (meaning you’d receive something by way of a payout), in many cases that net benefit was judged too small to justify the rigmarole of claiming, or the risk of the premium going up.

No-claims discount

While you can’t know what next year’s premium will be, if you’re benefiting from a no-claims discount (NCD), you’ll be able to identify in your paperwork how large that discount currently is, and how much of it you’d lose as a result of making a claim.

Not all claims will affect your NCD, though. Glass damage, for example, is usually exempt, as are claims relating to add-on policies (such as key-cover), protected claims, vandalism claims, and claims where the responsible party was uninsured.

Extra hassle

Sometimes, claiming incurs complications that can throw the benefit into question. In some cases, it’s worth asking yourself whether the reimbursement is worth the hassle of the phone calls and paperwork involved.

Find out more: Our guide on car insurance claims reveals which insurers are rated the best and worst for claims handling.

Do I have to contact my insurer at all?

The bottom line is that car insurers expect to be notified of any incident that could potentially lead to a claim – so you should contact them even if you don’t plan to make one.

Not doing so could risk putting you in breach of your policy’s terms and conditions.

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