Category Archives: No Claims Bonus

Should I report an accident to my Insurance Company?

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Your contract with your Insurance Company requires you to ‘promptly’ report any accidents you are involved in, whether it was your fault or non fault. It is in the terms and conditions of the policy that you confirmed you had read when you ticked the box. I know….who really reads the T&Cs!? but you really should do when it comes to car Insurance as there are a LOT of public misconceptions.
The reason the Insurance Company wants to know of any accidents is that when they calculate the cost of your policy they are actually calculating the ‘risk’ of Insuring you (how much you pay them against who much they may have to pay out). Obviously someone who never has any accidents will be considered a lower risk than someone who does. However something that is not widely known/realised:
Your Insurance Company will count a claim against you where you were at fault even if you settle the claim privately.

Many people think if they pay themselves the insurer will not put their policy up, this is incorrect, the policyholder is now seen as a higher risk even though it did not cost the Insurer a penny. If the Insurer does not pay anything then your No Claims Bonus is not affected but No Claims Bonus is applied AFTER the policy risk has been calculated – so the base policy cost goes up and then the NCB is applied. So basically there is no point settling a claim privately if your Insurer knows about the claim – they will increase the cost of your policy up by the same amount regardless.

You also need to provide your Insurance Company with any information you have about the incident including the Third Party details (this is also in the Terms & Conditions) as sometimes delaying this can mean you are increasing the cost of the claim for your Insurer by not giving them the means to deal with the Third Party quickly, the Third Party could be directed to an Accident Management Company who can increase the cost of the claim legitimately with hire cars and Injury solicitors etc. In some cases an Insurer will refuse to deal with your claim if they feel you have increased the cost of a clam by refusing to pass on vital details in the hope that it will ‘go away’.


No Claims Discount/Bonus EXPLAINED

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No  Claims Discount (NCD) is built up over time when you do not claim for an accident.  The more years that have passed without you making a claim means you get a larger discount on your policy cost, because you are considered a lower risk to insure. When you have a fault claim or a split fault claim then your NCD will step back by 2 years. If you not claimed for have over 4 years, most Insurance companies will offer to Protect your NCD for an extra payment. This usually means they will let you have 2 fault or split fault claims within a five year period before your NCD starts to reduce.

If  you have an accident that is not your fault then this will not affect your No Claims Discount as long as your insurance company claims all the costs of your repairs back from the other Insurance Company. If your Insurance company is not able to claim the costs back (because you did not get the other vehicles registration number or the other driver was not insured), then it will be considered a claim on your policy regardless of whether you were at fault or not, as your Insurance company paid for your repairs but could not claim their costs back.

NCD is applied to the overall cost of the policy. Your premium is calculated by your driving history, previous accidents, where you live, where vehicle is kept overnight, if you use it for business etc. Once the premium is calculated that is when what ever No Claims Discount you have is applied. That means if you do have an accident but have protected  NCD, your premium will still increase as you are seen as a higher risk, it just means the same discount will be applied to a higher premium.