Sunday, June 13

After claiming an accident, does car insurance premium increase?

Accidents do impact the car insurance premiums if you so decide to claim it. The reason is that your accident claim indicates that you are a risky customer. So the more accident claims history, the higher your premium.

You can be charged higher in a number of ways if you are perceived as a risky customer. While some motor insurance companies may just offer you a smaller cover, others may offer you only a few of all the relevant add-on covers. Besides, some insurers may also offer you third party insurance rather than comprehensive car insurance.

However, if you decide against filing a car insurance claim after an accident, you won’t have any impact on your renewal premium. But this is possible only in case your car is not up for inspection at the time of renewal.

It must be noted that if the damage is discovered during inspection or the repair work found, your car insurance renewal premium will jump higher.

Reason why insurance premium goes up after an accident claim? 

  • One of the most important reasons why accidents result in higher premiums is because the customer loses the accumulated No Claim Bonus (NCB).
  • NCB is a discount offered by the insurance companies to their policyholders in case no claims are made in their previous policy year.
  • The NCB discount can be accumulated for every year without a claim which can earn a customer 50% discount on the renewal premium. If the customer loses this discount, it can lead to higher premiums.

Impact of accident claims on third party car insurance

An accident does not impact the third party car insurance premium since the premium is decided by the Insurance Regulator and Development Authority.

How Can you keep your insurance premium low despite car damage?

  • Don’t raise a claim in case of minor damages

If your car has not suffered substantial damage you can choose not to raise a claim thereby saving your No Claim Bonus (NCB).

  • Increase your voluntary deductible 

Premiums can also be kept lower if you increase your voluntary deductible. Since you share part of the claim amount the insurer charges a lower premium at the time of signing up for the policy.

  • Install Anti-theft devices 

Your car insurance premium can be lowered if you install an anti-theft device in your car. As you lower the risk involved in selling you an insurance you insurance premium is also lower.

  • Buy car insurance online 

A number of car insurance companies  tend to charge lower premiums when customers buy insurance online. It is possible for the insurer to do so as the operating cost in the online mode is lower.

Conclusion

In an unfortunate circumstance where your car has suffered damage, you may want to avoid raising a claim, in case it’s affordable. This allows you to keep the premium lower. Use a car insurance calculator to calculate car insurance premium online. While avoiding an accident may not be completely in your hands, making the right financial calls very well is.

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