Delay in declaring minor car scratch damage to insurance company - will it invalidate claim?

Helen_Tom

Hi there,

I would like to get some advice if possible as unsure what to do. I should say at the outset that I genuinely didn't know that you need to declare any car incident to your insurance company regardless of fault or severity and even if you don't intend to claim. I feel quite stupid now for not knowing this!

Around a month ago I accidentally scraped our next door neighbour's car bumper while parking, causing a small amount of superficial scratches on one corner. I told our neighbours the same day and they said they would look into whether they had scratch damage cover on their insurance. We then didn't hear anything from them for over two weeks. As I wasn't sure whether they'd think it was even worth repairing we left it and didn't report it to our insurance.

A week ago I received a text from next door to say they were getting quotes for it to be repaired. I was OK with this as was expecting a few hundred pounds (even up to £500) of repair work for a respray, which I was planning to reimburse them for or pay the garage for on their behalf. 

Two days ago the neighbour sent me the quotes they have received which are significantly above what we expected, ranging from £1700 to £1900 including VAT. This is to replace the entire bumper and do various system resets and calibrations - far more work than we anticipated.

Given the costs I then looked at our car insurance policy (with Admiral) as I thought that even with the hike in our premiums and losing our no claims bonus it would still be cheaper for next door to claim for the repair work through our insurance rather than spending nearly £2k on the repairs ourselves. 

I then saw to my dismay that we should have reported the damage to the insurance company within 48 hours. There is also a clause saying that not doing so may mean they will not pay the claim or may even void our insurance policy altogether.

So my question is - if we report the incident now to our insurance company (a month after the damage occurred), and in anticipation that next door may need to claim on our insurance, how likely is it they will turn around and say we're not paying for the claim but we will still increase your premiums and remove your no claims bonus? Or is there some leniency if you explain it was a honest mistake? I am hoping that the nuclear option of cancelling our insurance altogether isn't likely given it's our first time reporting any damage/making a claim and is just superficial damage that hasn't worsened in the intervening time. 

I would be so grateful for any advice if you have been in this situation or know the industry as really not sure what to do!

Thanks in advance.

Aretnap

It is unlikely to cause you problems. While the terms of the policy do require you to tell the insurer quickly, as a general rule breaching the terms of a policy is only grounds for rejecting a claim if the breach actually caused the incident that led to the claim, or at least made it more serious.

As an example, in the claiming for your own damage scenario, if you cause some damage to your own car, spend some time deciding what to do and end up reporting it late to the insurer, the insurer still has to deal with the claim. OTOH if in the time you've been delaying rust has set in to the damaged area, resulting in a much more expensive repair, then the insurer might be justified in rejecting the claim, or at least in only paying what it would have cost to repair had you given them the chance to do it promptly. 

DullGreyGuy

Helen_Tom said:

I would like to get some advice if possible as unsure what to do. I should say at the outset that I genuinely didn't know that you need to declare any car incident to your insurance company regardless of fault or severity and even if you don't intend to claim. I feel quite stupid now for not knowing this!

Around a month ago I accidentally scraped our next door neighbour's car bumper while parking, causing a small amount of superficial scratches on one corner. I told our neighbours the same day and they said they would look into whether they had scratch damage cover on their insurance. We then didn't hear anything from them for over two weeks. As I wasn't sure whether they'd think it was even worth repairing we left it and didn't report it to our insurance.

A week ago I received a text from next door to say they were getting quotes for it to be repaired. I was OK with this as was expecting a few hundred pounds (even up to £500) of repair work for a respray, which I was planning to reimburse them for or pay the garage for on their behalf. 

Two days ago the neighbour sent me the quotes they have received which are significantly above what we expected, ranging from £1700 to £1900 including VAT. This is to replace the entire bumper and do various system resets and calibrations - far more work than we anticipated.

Given the costs I then looked at our car insurance policy (with Admiral) as I thought that even with the hike in our premiums and losing our no claims bonus it would still be cheaper for next door to claim for the repair work through our insurance rather than spending nearly £2k on the repairs ourselves. 

I then saw to my dismay that we should have reported the damage to the insurance company within 48 hours. There is also a clause saying that not doing so may mean they will not pay the claim or may even void our insurance policy altogether.

So my question is - if we report the incident now to our insurance company (a month after the damage occurred), and in anticipation that next door may need to claim on our insurance, how likely is it they will turn around and say we're not paying for the claim but we will still increase your premiums and remove your no claims bonus? Or is there some leniency if you explain it was a honest mistake? I am hoping that the nuclear option of cancelling our insurance altogether isn't likely given it's our first time reporting any damage/making a claim and is just superficial damage that hasn't worsened in the intervening time. 

I would be so grateful for any advice if you have been in this situation or know the industry as really not sure what to do!

Insurers want to be told as soon as practicably possible, particularly for fault claims, because they want to be able to control the claim... namely get to the third party before they are in the arms of an accident management company and in a very expensive hire car. 

An insurer will generally have no issue with late reporting unless the delay has prejudiced their case, eg the area of damage has started to rust so now needs replacing rather than repairing. If you dont make a big thing about it then it's unlikely that they will. 

Helen_Tom

Thank you very much for your replies. It's reassuring to read that it shouldn't be a big issue reporting late. 

Is it possible to report the claim as a named driver rather than as the main policy holder? My partner is the policy holder and I am a named driver, but obviously I was the one driving at the time and know what happened so it would be easier if I can handle things. However, I'm not sure if they will say they only speak to the main policy holder about claims.

DullGreyGuy

Helen_Tom said:

Thank you very much for your replies. It's reassuring to read that it shouldn't be a big issue reporting late. 

Is it possible to report the claim as a named driver rather than as the main policy holder? My partner is the policy holder and I am a named driver, but obviously I was the one driving at the time and know what happened so it would be easier if I can handle things. However, I'm not sure if they will say they only speak to the main policy holder about claims.

Will depend on the insurer but generally most will take the report from the named driver if they were the one driving at the time. It may be easier to do it when you are together just in case they want to speak to the policyholder first before talking to you. 

Helen_Tom

Thanks for your help!