Car Hire Excess Insurance - Does a Claim Affect No Claims/Future Insurance Costs?

Alex_pea3323

Hi there, 

I'm hoping someone can shed some light on this situation for me. I purchased car hire excess insurance with a 3rd party insurer after following a recommendation on the MSE website and using their recommended insurer. Whilst we were on holiday in rural France, someone bumped our parked car and scraped/dented the door frame. We weren't with the car at the time, and there were no cameras, so I guess it's a no fault claim but with no other party to reclaim the damages from. We have been charged £640 for the repair (ridiculous for what it was), but my husband is reluctant to claim the excess insurance as he doesn't want his no claims bonus/future insurance costs affected. 

What i'm struggling to understand is why MSE would recommend using a 3rd party insurer for the excess, if you stand to lose out (either through damage cost or future insurance costs) when an accident happens? I'm either missing something or it's pretty bad advice..?! 

Any advice would be greatly appreciated, thank you!

DullGreyGuy

Fault as far as an insurer in the UK is concerned is purely if the insurer has a net outlay at the end of the claim and is not directly related to blame. So in a hit and run it is typically a fault accident because the third party is unidentified and so the insurer cannot recover their outlay. 

£640 is a tiny amount to be charged if thats actually for the repair itself and loss of revenue etc rather than just the cap of the hire excess. Hire companies repair costs do tend to be cheaper than insurance quotes because many do them in house or have a pet backstreet garage that does them at near cost given the steady supply of work they get. This is partially offset often by them charging you for the days it's off the road being repaired and not generating revenue (though this should be tempered by the utilisation rate). 

So... his no claims bonus will not be effected because he is no making a claim on his insurance. 

He will be required to report the incident to future insurers for the next 3-5 years but many people will choose to "forget" to do so but the more paper trail there is the more chances you have of being caught. Obvs MSE itself will promote you following your legal requirements so the incident will impact premiums no matter if you claim on the excess insurance or not so no reason not to get the £640 back (if you can). Private users on this forum are much more comfortable promoting fraud and so some may understand your caution, others may say Excess Insurance tends to be niche providers so your Motor insurer will never find out.

I work in the insurance industry so where I stand on insurance fraud is going to be fairly obvious.

Aretnap

Making a claim on your excess insurance will have no impact on the no claims bonus on your regular car insurance policy - you haven't made a claim on that policy. 

Come renewal time though, your car insurer will still ask "have you had and accidents or claims in the last X years" and you would have to answer "yes" to that question, as you have had an accident. That might have an effect on your premium, even though you would still have your no claims discount. But note that you would have to answer yes whether you claim on the excess insurance or not - claiming doesn't change much at this point. 

(Whether your insurer would find out about an accident in a hire car abroad if you didn't tell them, and whether they would be more likely to find out if you had made a claim with a UK-based excess insurer, are questions that some people might ask I suppose. But lying to your insurer about your accident history isn't a course of action that I'd recommend anyway).

Mark_d

Regardless of whether you claim or not, there has been an incident that should be reported to car insurance and will likely result in an increased premium.  You might as well get some benefit from your excess insurance policy - so make a claim.

Your no claims discount on your main car insurance policy won't be affected because you haven't made a claim on this policy.

Alex_pea3323

DullGreyGuy said:

Obvs MSE itself will promote you following your legal requirements so the incident will impact premiums no matter if you claim on the excess insurance or not so no reason not to get the £640 back (if you can). Private users on this forum are much more comfortable promoting fraud and so some may understand your caution, others may say Excess Insurance tends to be niche providers so your Motor insurer will never find out.

I work in the insurance industry so where I stand on insurance fraud is going to be fairly obvious.

Thanks for your advice/insight. I'm not entirely sure what you mean by MSE promoting me, please could you clarify in layman's terms? 

Also to be clear, nobody has any intention of committing insurance fraud. Neither myself or by husband have ever had so much as a scratch before so I simply wanted to understand the implications of submitting a claim versus taking the financial hit. The fact that you have to disclose any accident (claim or no claim) clears that up, thank you. 

DullGreyGuy

Alex_pea3323 said:

DullGreyGuy said:

Obvs MSE itself will promote you following your legal requirements so the incident will impact premiums no matter if you claim on the excess insurance or not so no reason not to get the £640 back (if you can). Private users on this forum are much more comfortable promoting fraud and so some may understand your caution, others may say Excess Insurance tends to be niche providers so your Motor insurer will never find out.

I work in the insurance industry so where I stand on insurance fraud is going to be fairly obvious.

Thanks for your advice/insight. I'm not entirely sure what you mean by MSE promoting me, please could you clarify in layman's terms? 

Also to be clear, nobody has any intention of committing insurance fraud. Neither myself or by husband have ever had so much as a scratch before so I simply wanted to understand the implications of submitting a claim versus taking the financial hit. The fact that you have to disclose any accident (claim or no claim) clears that up, thank you. 

MSE is owned by MoneySupermarket which is a Financial Conduct Authority regulated group. As such any editorial or anything officially from MSE/MSM itself will always tell you to do the right thing of informing your insurers about all incidents. 

You had asked:

Alex_pea3323 said:

What i'm struggling to understand is why MSE would recommend using a 3rd party insurer for the excess, if you stand to lose out (either through damage cost or future insurance costs) when an accident happens? 

The above was the reason because irrespective of if you had the excess insurance or not they'd say you will be reporting it and so the "lose out" will happen either way and so its a case of do you pay X for third party insurance, Y for the hire car companies own excess waiver or gamble and pay W as the excess where X is always less than Y