A simples guide

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 how your insurance might be affected.

What’s a no-fault car insurance claim?

A no-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 is 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 the costs, your claim will be recorded as a no-fault claim on your insurance history.

What’s an at-fault insurance claim?

If an accident is completely your fault, say you hit a stationary object, your claim will be noted as an at-fault claim on your insurance history.

However, an at-fault claim could be attributed to you if your insurance provider can’t find anyone else to blame – 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 the costs associated with the repairs.

Will my car insurance increase after an accident?

Regardless of whose fault it was, making a claim will affect your car insurance premium and it’s likely to increase, although a no-fault claim won’t affect it as much as an at-fault claim.
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 have statistical evidence to show 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.

car accident

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 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 car accidents you’ve been involved in as a driver. However, you might not realise that you need to disclose details of all vehicle accidents. So, if you’re applying for car insurance and you’ve been involved in an accident while riding a motorcycle, for example, you’ll need to tell your insurance provider about the incident.

The same applies to any accidents you may have had while driving a company car. Your insurance provider will expect to be told about these too.

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.

However, insurance providers have a legal duty to ask all relevant questions when you apply for car insurance, and claims cannot be declined for non-disclosure unless you deliberately or recklessly withhold information.

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

If your insurance provider acts unreasonably in declining a claim on the grounds of non-disclosure, your first step should be to make a formal complaint to the company. 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 company 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.

Compare car insurance and save money

If you’re concerned about the cost of your insurance increasing after an accident, it pays to shop around. That’s why you should use our car insurance comparison service when it comes to renewing your car insurance.

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