Your car insurance premium is based on a range of factors, including your age, where you live, what you drive and your driving experience. Insurers will also take into account your claims history, which has an important role to play in deciding how much you pay.
When it comes to car insurance, every claim is unique. However, most drivers who’ve made a claim have one thing in common — their car insurance premiums go up.
Claims can range from very minor, such as a broken wing mirror or dented bumper, to very serious, such as a vehicle being written-off and fatalities.
Different claims involve different costs, so these costs will determine what happens to the price of your future car insurance premiums.
In terms of the impact on your car insurance premium, the deciding factor will be whether you’re deemed to have a "fault” or "no-fault” claim.
This means your insurer will consider the circumstances of your claim and determine whether you were to blame.
This is not always clear cut, for example: if your car was broken into or vandalised.
In most cases when you make a claim on your car insurance, you’ll lose some or all of the no claims bonus you’ve built up, if you didn’t protect you no claims bonus when you took out the policy. Many insurers will reduce your no claims by two years for each incident.
You may even lose your no claims bonus where you are not to blame — for example if your car was vandalised. This’ll be because your insurer will be unable to recover its costs from the guilty party.
Being hit by an uninsured driver is another example of where you could lose your no claims bonus. Fortunately, this is increasingly rare, as more insurers are introducing uninsured driver clauses, meaning your no claims bonus is protected in the event your car’s hit by a driver without insurance.
Even if a claim stemmed from an event that was not at all your fault, such as if your car was hit from behind while you were stopped at a red light you could lose your no claims bonus. This is because it’s a no claims bonus, not a no blame bonus, and it’s earned for every year you drive without making a claim regardless of whose’s held accountable.
You can also pay to protect your no claims bonus so it will stay in place even if you make an at-fault claim.
However, your insurance premium could still go up even if your no claims bonus remains intact. This is because:
depending on the insurer, you’ll be asked to state whether you’ve made any claims in the last three to five years
insurers will calculate your premium based on your risk profile, and any no claims bonus is applied to that amount
you’re likely to notice the biggest price rise in the first year after making a claim, as you’ll have started to rebuild your no claims bonus in the following years
There are several steps that can be taken to reduce the cost of car insurance for drivers with claims. These include:
Raise your voluntary excess: the higher your car insurance excess, the lower your premiums could be, but make sure you can afford the payment if you make another claim
Consider where to park: keep your car in a more secure place, such as a driveway or garage, or at least under a street lamp, if possible
Switch to a cheaper car: perhaps trade in your car for a one in a lower insurance group
Consider telematics: also known as black box insurance. This option uses GPS technology to gauge how well you drive, adjusting your insurance premium accordingly
How long a previous claim impacts your cover will depend on the insurer.
Most insurers will ask about any claims and accidents you've had over a set number of years, and not be interested in any claims made before this time. Typically, insurers will ask about the last five years, however some car insurance companies ask about the last three years, which could be worth searching for when you come to renew.
Remember, it’s crucial to be honest about any previous claims. If you’re not and your insurer later finds out, your policy could be invalidated and any future claims rejected.
The easiest way to check your car insurance claims history is to ask your current insurer for any claims you’ve made to date. You could also ask your previous insurer if you switched in the last few years.
You’ll need odge a Subject Access Request if you want more information. This gives you the right to find out what information a company or organisation holds on you under data protection law.
In this case, you’d make a request to the Claims and Underwriting Exchange (CUE). This is the central database of all motor, home, personal injury and industrial illness incidents reported by insurers in the UK. Your data is held for six years from the date the claim was closed.
If you get an initial car insurance quote online, be sure to call the insurer to discuss the details of your previous claim.
Some insurance providers may be willing to reconsider your premium in light of any additional information you can give them.
And as ever, shopping around for car insurance quotes is likely to get you the best deal.