What are the premium implications of a car insurance claim?
Claiming a car damage on your auto insurance policy can result in a higher premium. The consequences do not usually become noticeable immediately after the claim, but per the next contract expiration date. This is because the claim may be charged against your claim-free years.
It can happen to the best motorist. An accident damages your car. Was the damage caused by the other party? If so, your damages can be recovered. If the damage is not recoverable, you have to file the claim with your own car insurance company. If your car is only WA insured, you will not be compensated by your insurer. With a WA cascoof WA limited casco there are possibilities.
Car damage claim on auto 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 hull insurance will cost you claim-free years unless the damage is recovered from another party. The consequences for your wallet can be significant. For example, you drop from 60% to 40% discount. The financial consequences remain noticeable for years. You have to rebuild your discount.
A simplified example to illustrate
This excludes policy fees and insurance taxes for car insurance. Discounts were also chosen at random.
The premium without taking into account discount is €1,000 per year. You are entitled to 60% discount, so you pay €400 per year. Vandalism causes €500 damage to your car in 2016. You are WA cascade insured, so you can submit the damage to the insurer. Possibly minus the deductible, the damage is compensated. Your discount drops, for example, to 40% as a result, so the premium rises to €600.
The premium increase in 2017 is: €600 - €400 = €200. In reality, the financial loss is greater. In fact, if the damage had not been claimed, the discount would have increased to 65%. So actually the claim costs you €250 in the first year.
Impact on premium in 2018
If no new claim is made, the discount rises again to 45%. The premium for this year comes to €550. If you had not claimed the damage in 2016, the discount would have risen to 70% this year, for example. In that case, the premium would be €300. The second year the claim also costs you an additional €250 in premium again.
Conclusion - You had better not have claimed the €500 damage on the car insurance. It will cost you €250 per year more in extra premium. However, this is just one example. For example, if you have accumulated 15 claim-free years, a claim will not immediately cause a premium increase. When in doubt about whether or not to claim on your car insurance, it is best to seek advice.
Also read:
Negative claim-free years on your name? What next?
Roadmap - switching car insurance
Car insurance coverage: which coverages can you choose?
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