When should you not claim your car insurance?
Car accidents can be anything; you bump your car or find a wing mirror broken while returning from the car park. However, you stay cool thinking you have car insurance to cover. Making your car insurance claim immediately after an accident appears to be the first and right step, but it takes away the NCB (No-claim bonus) benefit accrued on your motor.
As such, there is no rule to file a car insurance claim, but you should understand what you will lose on filing a claim. Whether you file a claim or not, it relies on factors such as it affects the NCB, future premiums, the quantum of loss, and applicable deductibles. Here are a few reasons showing why not to claim your car insurance:
Protect your NCB
NCB represents the No Claim Bonus. It is a benefit, a discount type given to you for not raising any claim in the policy year. This discount is the renewal premium, and when a car owner does not claim for the first 5 consecutive years, the renewal benefit on the discount rises to 50%. Nevertheless, if you make a car insurance claim, the NCB will drop by 30% for the first claim and will drop to 0% if a 2nd claims occurs over the same year. Eg If you have a 50% NCB and you make a claim, the NCD will drop to 20% and will drop to 0% if you make another claim on the same year.
Excess
Excess is another factor to consider before claiming your car insurance. There is a compulsory deductible as well as voluntary deductible and the excess will determine the premium. Thus, it means you will bear the voluntary deductible amount as you claim. On paying the deductible amount only, the insurer pays the remaining amount of the claim.
Other factors
Often filing insurance claims harms the claim history. Repetitive claims result in increasing the premium renewal rate. However, it relies on the claim's nature. In case your vehicle damage is to a great extent, or your claim is strong, you can go ahead with the claim.
On the other hand, if another car hits your car and you consider filing a claim, it means your rates are sure to increase if you are at fault too. You cannot avoid the hike in the cost if you are faulty. Thus, understand the nature of your claim before considering filing a car insurance claim. In any case, if the accident takes place due to a third-party fault, your policy NCB stays intact. The NCB discount is not available on the liability portion. It is for their damage portion.
Therefore, a thumb rule is to claim only if the mishap causes a loss. Avoid filing claims for small incidents, such as a dent on your car body or the bumper.
