What are the premium consequences of a claim on car insurance?
Claiming a car damage on the car insurance can lead to a higher premium. The consequences are usually not noticeable immediately after the claim, but on the first following contract expiry date. This is because the claim can be at the expense of your claim-free years.
It can happen to the best motorist. An accident damages your car. Was the damage caused by the other party? In that case your damage can be recovered. If the damage cannot be recovered, you have to claim it from your own car insurance company. If your car only has WA insurance, your insurer will not compensate you for the damage. There are possibilities with WA-cascade or WA limited casco.
Claiming car damage on the car insurance?
Car damage caused by an accident or vandalism can be claimed on the WA casco car insurance. On the WA limited casco you can only submit a claim for damage due to certain causes. Examples are broken windows, theft of the car, storm damage and collision with stray animals. These claims do not affect your claim-free years. A claim that can only be recovered from the third-party hull insurance does.
What are the consequences of a claim?
A claim on the hull insurance will cost you years of claim-free time, unless the damage is recovered from another party. The consequences for your wallet can be considerable. For example, you will go down from 60% to 40% discount. The financial consequences will be noticeable for years. You have to build up the discount again.
A simplified example to illustrate this
This does not include policy fees and insurance premium tax for car insurance. Also, the discounts were chosen randomly.
The premium without discount is €1,000 per year. You are entitled to 60% discount, so you pay €400 per year. Due to vandalism, a damage of €500 is caused to your car in 2016. You are insured under the third-party liability insurance, so you can submit the claim to the insurer. If necessary, the damage will be compensated with a deduction of the excess. Your discount drops to 40%, for example, so the premium rises to €600.
The premium increase in 2017 is: €600 - €400 = €200. In reality, the financial loss is greater. If the claim had not been made, the discount would have increased to 65%. So actually the claim costs you €250 in the first year.
The consequences for the premium in 2018
If no new damage is claimed, the discount rises again to 45%. The premium for this year is €550. If you had not claimed the damage in 2016 the discount would have increased to 70% this year, for example. The premium in that case would be €300. The second year the claim also costs you an additional €250 in premium.
Conclusion - It would have been better not to claim the €500 damage on your car insurance. It will cost you €250 per year more in extra premium. However, this is only one example. If you have accrued 15 claim-free years, a claim will not immediately result in an increase in premium. When in doubt about whether or not to claim the damage on your car insurance, it is best to seek advice.
Read also:
Negative claim-free years in your name? What to do now?
Step-by-step plan - switching car insurance
Car insurance cover: which covers can you choose?
Related pages about car damage
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