Claiming To Your Car Insurance Company
As we have discussed on previous occasions, filling up a claim for your insurance company, in some cases, will be bad for your car insurance renewal. It has been demonstrated that in many cases the car accident claims can be more damaging for the customer, rather than helping him save money. Therefore, it is vital to be able to recognize when is the appropriate time to file a car insurance claim or will it be better to simply cover the charges yourself without making the claims and only do reporting to your insurance provider? (It is necessary for car owners to reporting the accident within 24 hours to avoid late reporting and be penalized 10% reduction on the No Claims Bonus)
Your first step is to recognize your No Claim Discount (NCD) and it is a discount insurer provide to their customer according to their claim history. The NCD works in way that the car owners will enjoy 10% discount every year and up to 50% discount and certain insurance companies offer up to 60% when there is no accident claims. If this is your first time buying car, after the first year and it will be 10% discount for the renewal premium.
Let's assume you met with an accident and deciding whether to make a claim against the car insurance company and for you to make a better decision you should calculate the repair cost which you must take into consideration how much Own Damage Excess (this is the first cost you need to pay before you can make a claims and usually it starts with $500) you need to pay for it. If the total repair cost is significantly more than the Own Damage Excess, you should consider not filing it to your company as you will lose your No Claim Bonus as a result of it and it won’t be economically justified. In this case, it turns out that it is cheaper to repair the damage by yourself than to actually using your car insurance to make the claim.
Secondly, if the damage was provoked by a third party and they can repair your car damaged it is very likely than simply letting the third-party insurance pay for your expenses will turn out to be much cheaper than attending to your own insurance. In some cases, this process is tedious and might require several previous steps before getting your car fixed. However, using this mechanism this accident won’t throw to the garbage your hard earned No Claim Nonus.
But the history does not stop here, most car insurance companies use this information to calculate your car insurance costs, therefore you will not only lose your No Claim Bonus, but you will also end up paying more than the initial base cost. So, it is tremendously important to know when to simply not claim to your car insurance company, and do file these claims only when it becomes economically justified.
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