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Will an accident affect next year's car insurance premium?

Will an accident affect next year's car insurance premium?

After you’ve had a car accident, your thoughts might turn to what happens when it comes to renewing your car insurance. Unfortunately, you can’t simply assume that if the accident wasn’t your fault, there’ll be no impact on next year’s premium. Here’s our guide to what you need to know.

Daniel Hutson
From the Motor team
minute read
posted 28 OCTOBER 2019

Will my car insurance increase after an accident?

Yes. Regardless of whose fault it was, making a claim will almost always lead to an increase in your car insurance premium. Luckily, a non-fault claim won’t affect it as much as an at-fault claim will.

Even if you don’t make a claim after an accident, you could still see an increase in your insurance premium. That’s because some insurance providers consider that drivers who’ve had an accident (even if it wasn’t their fault and they didn’t claim for it) are more likely to be involved in another accident later on.

What’s a non-fault car insurance claim?

A non-fault claim is when the liability (or fault) lies completely with someone else. For example, if your car was stationary and another driver backed into it, then that driver was at fault.

After an accident, your insurance provider will try to recoup the costs of any repairs to your vehicle from the person whose fault it was. If they’re successful in getting back all of the costs, your claim will be recorded as a non-fault claim on your insurance history.

What’s an at-fault insurance claim?

If an accident is completely your fault, your claim will be noted as an at-fault claim on your insurance history.

However, an at-fault claim could also be attributed to you if your insurance provider can’t find anyone else to blame for an accident that you were involved in. For example, if your car’s been vandalised and the culprits can’t be found, or if your insurance provider can’t get back all of the costs associated with the repairs.

Will making a claim affect my no claims discount (NCD)?

If you’ve protected your no claims discount, then making a claim shouldn’t affect the number of years that contribute to your NCD.

However, if you’ve had an accident, the basic cost of your premium is likely to go up. So, although your NCD discount remains the same, it’s applied after your premium is calculated, resulting in an overall increase.

If you haven’t protected your NCD, making an at-fault claim for an accident will almost certainly affect your NCD years.

Do I need to tell an insurance provider about previous car accidents?

When you apply for car insurance, you’re expected to disclose details of all previous vehicle accidents you’ve been involved in as a driver in the past 5 years, even if they weren’t your fault. This includes all vehicle accidents from cars to motorbikes, trucks to vans, and everything in between.

You’ll also need to mention if you’ve been involved in any accidents while driving a company car.

These accidents must be disclosed even if you didn’t make an insurance claim at the time, or if you weren’t at fault in any way.

What will happen if I don’t inform my insurance provider about an accident?

Insurance providers carry out cross-reference checks between different vehicle insurance databases, so it’s highly likely that any non-disclosure will be identified. If you fail to tell your insurance provider about other vehicle accidents, then your policy could be invalidated.

What can I do if my insurance claim is declined because of non-disclosure?

Your first step should be to make a formal complaint if your insurance provider acts unreasonably in declining a claim on the grounds of non-disclosure. If they decline your complaint, you can refer your complaint to the independent Financial Ombudsman Service (FOS).

Referrals to the FOS must be made within six months of the date the insurance provider sends you its final decision letter regarding your complaint.

The FOS was set up by Government and will carefully consider whether the insurance provider was right to reject your complaint. Its services are free to use and any decisions it makes are legally binding on a company. So, for example, if the FOS finds in your favour regarding a vehicle insurance claim, it will instruct the insurance provider to pay your claim and may also award you an extra payment for interest on the value of the claim.

The FOS may not uphold your complaint if it feels that you engaged in deliberate non-disclosure, or reckless non-disclosure where it’s extremely unlikely that you overlooked the relevant information.

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If you’re concerned about the cost of your insurance increasing after an accident, it pays to shop around.

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