Why has my car insurance premium risen after a claim?

Question: If I pay a motor insurance premium to cover the possibility of an accident, why am I penalised for a number of years with an increase to my insurance payments after an accident has occurred? Isn’t that what I pay a premium for?

Answer: If you’re a driver, you pay an insurance premium to cover you, and other parties, for the costs of any accident you cause (or where you are involved but fault can’t be attributed). Your insurance does not cover you against any future premium increases which may result from your involvement in an accident.

Insurers set your premiums based on how likely they think you are to be involved in an accident, and how expensive that accident is likely to be.

Since they don’t know you personally, they use statistical data about other drivers similar to you, for example who are the same age, the same gender, and who live in the same area. Young men are more likely to have accidents, so their premiums are higher, other things being equal. And if your car is particularly expensive, the cost of repairing or replacing it could be higher, again pushing up policy costs.

If you are involved in an accident and need to make a claim, however, this gives your insurer more information about you. You are now considered a higher risk to insure (as statistically, someone who has made a claim in the past is more likely to do so again in future), so your premiums will go up.
This may seem unfair to you, especially if the accident was not your fault, but it is the only reasonable way insurers can set premiums.

If previous accidents and claims had no impact on insurance costs, safer drivers (who never made claims) would have to pay higher premiums, while those who caused the most accidents would pay less than at present.

Comments

[Ronnie Barker]

I think there is a 'fear' of making insurance claims because we're penalised the year after with a heftier premium. Why this is the case I do not know, but it only suits the insurance industry. I'd be sure plenty of people pay for damage themselves, or even don't have it repaired to avoid the wrath of the insurance company. No way round it, the law requires us to be insured. I myself had a recent claim, someone kindly drove into my car and drove off. Apparently I'm held to blame now as I made a claim to fix the damage. I now must declare this claim for the next 3 years and no doubt there'll be a penalty. They'll get the money back in the long run. I'm now a 'risk' because I claimed. I wonder how many people don't claim? We never hear about that? As a rule of thumb, we pay £40 per policy to cover uninsured drivers. Why? I don't pay for someone elses food. If you want to start a businees, start up in the insurance field, you won't be disappointed.

[Nigel Pipe]

Although not a claim on car insurance, I have experienced a similar situation with my touring caravan insurance. During a gale last year the top section of a tree in my neighbour's garden snapped off and was blown about 10yards across a tall hedge, hit the top of my caravan and landed several feet away in my garden. In the process the roof of my caravan was pierced and the cover over the caravan torn to pieces.
My neighbour kindly provided details of his personal liability insurance and this was forwarded to my insurance company.
My insurance company paid the cost of repairs to my caravan, around £400, without quibble. However, I was charged over £100 excess under the policy.
The insurance company then made a claim in full from my neighbour's insurance, leaving them not a penny out of funds.
I feel strongly that my excess payment should have been refunded but this was not forthcoming.
To top it off my insurance premium at renewal was raised by nearly 80%, which together with the excess payment would almost cover the cost of the claim, giving the company a nice little profit. Needless to say I did not renew my insurance with that company, but through Confused.com found a cheaper policy.
I have owned an insured caravan for over 30 years and this was my first claim. The damage to my caravan was unavoidable; certainly not any fault of my own. I do not, therefore, present any additional risk as a policy holder.
I concur with Ronnie Barker's remarks concerning the business nature of insurance companies.

[shirley-anne brine]

i too feel aggreived with car insurance,i am a named driver on my partners policy,why am i not allowed to have my own no claims bonus having been driving for 35years ,the insurance premium is geared to cover both of us to drive the same vehicle very unfair

[hass]

basically insurance companys takes advantage of us poor drivers just because its the law in the end we are actually paying the third party or when we make a claim they just take our money and add extra charges just because they are taking our money

[pB]

This article doesn't explain why someone should be penalised for making a claim. My insurance has gone up 200% after claiming for an accident where someone drove into my parked car at night ! 200% !! so what is my premium for then - this is supposed to cover them in the case of claims - instead they will take three times the cost of the rpairs within three years - this is just simple unregulated greed. Its shameful.

[Brian]

Why if I am invloved in an accident resulting in a claim paid in full by the third party insurers because the accident is not my fault, is my renewal premium adversly affected. Bearing in mind I have not made a claim?

[Toby]

I have been away from the UK for 8½ years, and have just taken out car insurance for the fiurst time in ten years. Recently I was hit on my motorbike and the other driver and his insurance company accepted full liability and the claim was settled happily in a matter of a few weeks. I have just taken out insurance on a car and found I was hit by nearly 20% extra because of this claim, and I will be hit with it for the next 5 years, unless I make another claim. What do you do? Not claim when your vehical is written off? Insurance is nothing but a legal scam.

[mr prince]

insurance conpanys are robbing us blind, someone hit my parked van and now my insurance on my car has gone up £240. so they get extra money from me and also charge the person whos was at fault, their must be some law were only person at blame gets penalised. lets hope one day law will be changed just like ppi charges and we all get rebate

[Mr Botham]

Just had my renewal through from Admiral it has gone up yet again. I was hit by another driver last year he accepted fault the claim was settled in a few weeks but took months to get my excess back. Now I find I am being over charged because someone hit me! how is that fair? I havent done anything wrong.
Another gripe I have it my quote for multicar insurance came in at £847 it was £540 last year even after the accident, that said I had to do a re-quote because they tried to charge us £930. So this year I re-quoted with them online and it drops by almost £200. You have to ask yourself how many people get ripped off by auto-renewal insurance quotes such as this? Same cars, same address, same drivers, no reduction in NCB so what gives? it seems to me that Auto-renewal is simply a way for them to try it on and sneakly charge you more for the same policy.
The government needs to clamp down hard on insurance companies and stop such practices as well as bringing a stop to innocent drivers being over charged after an accident that was not their fault.

I am sick and tired of RIP OFF BRITAIN

[Heremsaxn]

Creative designers connected with females shopping bags make clear different approaches to design unique product which can stay popular along with style. However it hermes kelly bag can be truly very difficult, for most of them only produce abrasive shopping Hermes Replica which can prada handbags possibly not stay the particular check of one’s time. Consequently they have to have to wait, investigation. Then again, immediately after equipment production, it is actually mainly Twenty four hours to make a brand new handbag out there. After Louit Vuitton shopping bags provides contact with equipment production, more and more vendors select this unique system. However even now many on hand made, one of the most well-known a single can be Hermes handbags, because hermes bags replica are generally created with rare along with superior materials like valuable precious metals, man made fiber, leather-based with alligator, crocodile, reptile, shark along with epidermis with zoysia, oxen, calf, goat, deer along with ostrich, this unique might result in extended period however , classy technologies.




___________________
Blogs links:
hermes birkin bags

Hermes Kelly 32
Hermes Kelly Other