Advice on car insurance 'claim or not to claim' please

Swisssilvie

I have a dilemma about a car insurance query I don’t know what to do. My son who was on my insurance (he’s 20) temporarily whilst back from Uni over Christmas scratched my neighbour’s car whilst pulling out of the car parking space. My neighbour got two quotes, the lower one of which comes to £420.00 I don’t know whether to put it thru insurance and lose 2 years of no-claims or whether it would be more cost effective to pay directly. I have no no claims protection and for two year’s loss of no claims Directline quoted my £ 54 for the remaining 3 months of my policy which I guess will equate to £ 220 over the whole of the next year. I am only 3rd party and already paying well over £250 as I have my daughter who is learning on the insurance and this would push it up to £500 for a 1989 Mazda on 3rd party.

I have heard that it is very difficult to change insurance companies if you have made a claim in the last 3 to 5 years, is this true?

I am in a real quandary on whether to pay the £420 directly or look upon the increased insurance as a ‘pay it off over time’ solution.

Any advice would be greatly appeciated, thank you.

Justicia

Interesting question

I would suggest that it rather depends on your financial abilities, as you refer to electing for an insurance premium hike as 'pay it off over time,’ which suggests to me that you are aware of needing a financially viable route, as well as for convenience.

I have heard many people's opinions being always put it through an insurance claim but dependant on funds available and how well you know your neighbour (if you are good friends for example), I would be inclined to opt for the pay it and avoid the insurance company loading my cover, as I would expect (being cynical of the ways of insurance) that I would be charged a lot more than the £420.00 quote for the repair in the long-term.

I don't think that it's difficult changing insurers with a claim on your recent policy, I think that it's more a case of them increasing your premiums accordingly and as they see fit.

If you do go for the pay it now option, I would urge you to obtain a hand written receipt for the money that you give, with details of the purpose of the transaction detailed, and both yours and your neighbour's names and signatures so that you have it for future reference.

If you do not know the neighbour well or there are any issues between you at all, I would go for the insurance option to save any stresses later on.

Hope that the above makes sense

vansboy

Have a look at this similar post

http://forums.moneysavingexpert.com/showthread.html?t=134436

Guess you'd be better paying up, than claiming.

VB

scheming_gypsy

i'd pay too.. as well as the increased premiums for 5 years you'll also have the excess to pay which is probably at least half of the £420. If you've a £200 excess then you'd need your insurance to not rise by £44 (ish) a year till it's off your record.

losgiganteskid

There will not be any excess to pay on a third party claim. Ironically, even though you may settle the claim yourself, your son needs to be mindful that if he applies for car insurance again he will still need to disclose this accident despite the fact there is no insurance claim. Also make sure the person having his/her car repaired restricts the loss just to the repairs to his/her car, and doesn't want to hire a replacement whilst his/her car is being repaired. It sometimes happens !!

Swisssilvie

thanks for your replies, have decided to just settle up and pay. Losgiganteskid - how would anyone ever be able to find out / prove that we settled a claim outside insurance and why does it have to be declared if you don't claim?

nadnad

although insurance compaines ask for a accident/loss history rather than a strictly claims history - nobody ever really chases this and as you said how would anyone ever find out. Insurance compaines work on the "utmost good faith" principle i.e that customers will disclose all relevant facts, however most people assume that when they are asked for a history of loss and or accidents that the insurance company simply means any claims that have been made. I wouldn't worry about this - i dont know anyone that has actually ever disclosed all losses and accidents - and I work in insurance.

losgiganteskid

Swisssilvie wrote:

thanks for your replies, have decided to just settle up and pay. Losgiganteskid - how would anyone ever be able to find out / prove that we settled a claim outside insurance and why does it have to be declared if you don't claim?

It will come as no surprize that insurers will/may decline to deal with an incident if answers on the proposal form are untrue or misleading. If your son (heaven forbid) has another serious incident and loss adjusters or investigators pay a personal visit to gleen more info (as is sometimes the case) it could easily "slip out" that he had this small bump and failed to mention it. When the insurer asks the question initially regarding previous accidents, it wants to build up a picture of risk assesment, so for example if YOU were the insurer and someone has had say 4 very minor fault bumps (all of which he has paid for himself) would you want to take on the risk without terms applied, knowing the next one he has may be of greater value and requires YOU to pay out ? - I wonder. So its the overall picture the insurer is trying to get a handle on, not whether or not an insurance claim was actually made.

nadnad

losgiganteskid - i take you are a broker or underwriter or something? i know that everything you have said is true (i've done my insurance exams) however insurance companies have never gone out of their way to explain the phrase they use ie "any accident or losses in the last 5 years" or whatever, most people genuinely think that it refers to claims. you're being very pernickity i can't see a loss adjustor or an investigator being too worried about a minor bump a person has had in previous years if what they are out to investiage is a serious accident and anyway - it owuldn't matter the utmost good faith principle applies to the extent that as long as the insured is telling all that they genuinely think is relevant - if it has nevr been explained that you are meant to declare everything - how are they to know that? and I work in insurance claims and I have never declared all bumps - whats the point - insurance co.'s could never prove it and like I said the fact that they never go out of their way to explain this fully shows that they dont really care either.