There are two critical monetary factors to consider before making a claim for damage to your vehicle from your insurer.
• Your policy excess
• Your no-claims bonus entitlement (NCB).
Your policy excess is the amount you pay towards repair (or deducted form a settlement figure your insurer offers in the event the car is considered a “write off” or stolen but not recovered.
At this point, you should note that most insurers deduct 2 years NCB for each and every claim you make.
• Firstly, take the amount of excess that applies to your policy.
• Next add the additional insurance premium you will be required to pay over the next 2-3 years
For example:
• You had an accident in July 2008, no other vehicle or people were involved but your car was damaged
• In October 2007 you paid £400 for your annual insurance policy.
• Your policy excess is £125.
• You had 3 years no claims bonus at your last renewal.
• Your NCB will reduce from 50% to 30% if you claim
At your next renewal in October 2008 you will therefore lose 20% NCB which equates to £80 in monetary terms (£400 x 20%).
At your renewal in 2009 you will have gone back up to 2 years no claims bonus so your NCB entitlement will be 40%. This equates to £40 (400 x 10%)
The real cost:
The real cost therefore if you claim from your insurer will be:-
£125 (policy excess) + £80 (additional cost due to reduced NCB at next policy renewal) + £40 (additional cost at renewal in 2009 = £245
From this example you will see that if the cost of repairs is less than £245, it is not technically worth claiming through your insurance company unless you are not in a position to pay for the repairs yourself.
Finally, don’t forget, like everything else, premiums are rising so you may want to adjust the figures mentioned above to reflect this
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