A simples guide

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

After you’ve had a car accident, received any compensation and filed away the paperwork, your thoughts might turn to what happens when it comes to renewing your car insurance. But is it as straightforward as simply presuming that if the accident wasn’t your fault then there’ll be no impact on next year’s premium, or is it a bit more complicated than that? 

Fault and no fault claims – think you know the difference?

You might think the difference is obvious and it’s true that no fault claims are what you expect them to be – they’re claims made where the liability (or fault) lies completely with someone else. For example, if your car was stationary and another driver backed into it – they are at fault. When you tell your insurance provider about what happened, they’ll try and recoup the costs of any repairs to your vehicle from the person whose fault it was. If they’re successful in getting all the costs back, your insurance history will record this as a ‘no-fault’ claim.

Fault claims on the other hand work in two ways. First – the most obvious way – where an incident is completely your fault and there’s clearly no denying it. Secondly, a fault claim could be attributed to you if your insurance provider can’t find anyone else to blame – such as if your car’s been vandalised and the culprits are no-where to be found or if your insurance provider can’t get back all the costs associated with repairs.

Whilst you’re shaking your head at the unfairness of it all, insurance providers have evidence that shows those who make a no fault claim are statistically more likely to make another claim in the future .

So 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 a fault claim.

car accident

So if I protect my NCD, does that mean my premium won’t increase?

Not necessarily. Even if your policy includes protected NCD that won’t stop the fundamental cost of your premium increasing.

Before you start head scratching – here’s how it works: your car insurance premium is worked out first (based on things like age, job, where you live, how you use your car and most importantly in this case – your claims history). Your claim will naturally increase the price you pay because you’re deemed at greater risk of making another claim. Your No Claims Discount is then applied to the premium that your insurance provider worked out. So your NCD hasn’t been affected but the basic cost of your insurance has.


So how much will it cost me?

The actual cost of your premium will be at the discretion of your insurance provider based on their criteria. If you didn’t protect your No Claims Discount, then you might find you lose some of it – again, how many years’ worth you lose will be down to your insurance provider. Generally, one year of NCD equates to approximately 30% off your premium, three years – 50% and five or more years could give you a 65% reduction, although insurance providers will have their own NCD scales.

How can I keep the costs down after an accident?

You could look at changing your car for one with a smaller engine – as a general rule, the more powerful your car, the higher the cost of insurance. Another alternative is to consider telematics (or black box) insurance which monitors your driving.

But if you’re concerned about the cost of your insurance increasing after an accident – it pays to shop around – which is why you should always use our car insurance comparison service when it comes to renewal.


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