When misfortune rains on motorists, no claim

Many drivers will pay for repairs themselves rather than get their insurer to foot the bill. Clare Francis looks at cover that won't compromise your bonus

Most motorists know they can often drive down the cost of their car insurance by scouring the market for the most competitive deal. But all that rigour will go out of the window if, once you've found a policy, you decide not to call on it in your hour of need.

Most motorists know they can often drive down the cost of their car insurance by scouring the market for the most competitive deal. But all that rigour will go out of the window if, once you've found a policy, you decide not to call on it in your hour of need.

That's the case with many drivers, who worry about the fate of their no-claims discount (NCD) or bonus (NCB). Most insurers offer a reduction on premiums to people who haven't made a claim on their insurance. This discount rises every year you don't claim, up to a maximum of 65 or 70 per cent, making a big difference to the premium.

But fear of losing this discount is putting a lot of drivers off claiming. New research from insurer More Th>n has found that 43 per cent of motorists would pay £200 or more on car repairs, rather than claim on their insurance, to ensure they don't lose their NCB. And in London, nearly 30 per cent of drivers would pay more than £500 out of their own pocket before making a claim.

Typically, depending on the insurer, you lose one or two years of discounts if you claim, and you run the risk of your premium increasing. Many drivers, therefore, don't think there's much point in making a call on their policy unless it's for a substantial amount. And they could be right. "If it's only for £200, it wouldn't be worth it, particularly if the no-claims discount isn't protected," says Russell Byrne, private motor product manager at AXA Insurance.

Most insurers offer customers the option of protecting their NCD, although this will increase the premium and you usually need at least four years' no-claims before you're be eligible. However, paying the extra could be worth it.

"If you make a claim, [your NCD would] step back two years, which would mean your discount is cut by about 20 per cent," says Richard Alger, market development manager for private motor insurance at Norwich Union. "If you live in a large city and are in the highest premium bracket, a 20 per cent increase can make a big difference to the cost."

But the terms of these guarantees vary, so David Pitt, motor insurance manager at More Th>n, recommends that you check the wording of the policy. More Th>n and Eagle Star both offer eligible customers bonuses for life, so regardless of how many claims you make, your NCD will not decrease.

But with most insurers your NCD is protected only for a certain number of claims (see the table above for details). Another result of making a claim is that your premium will go up, and most protected NCD policies don't offer cover for price hikes.

"We can't guarantee premiums," says Kathryn Pugh, spokeswoman at Eagle Star. "As a driver you represent a risk and your premium is calculated on this. If you have one claim, it doesn't really change your risk, but if you have a number, your risk profile would change and your premiums go up."

As part of its lifetime guarantee, More Th>n also ensures that your premiums won't be increased as a result of a claim. It believes that the fact most insurers don't do this is another reason why so many drivers would rather pay for repairs to their car out of their own pocket.

"It's a crazy situation when people are paying for car insurance and then not claiming for fear of losing their bonus," says Mr Pitt. "If you do have an unfortunate mishap, submit a claim. We're saying we will not increase your premium or reduce your no-claims bonus, and we've given that commitment contractually."

However, other insurers don't think this is a big issue for motorists. "The overriding factor for people is whether they want comprehensive cover or third party, fire and theft," says Craig Staniland, group head of motor underwriting at Churchill. "The level of NCD, and whether it's protected, and the excess are considerations, but I think these do play second fiddle to price."

Mr Staniland says he would interpret More Th>n's findings differently: if 43 per cent of drivers would be happy to spend £200 on car repairs rather than claim on their insurance, they should increase their excess. The standard level of excess varies depending on the insurer, though it tends to be around £120. But if you opt for a higher level, your premium will be reduced. So if you wouldn't make a claim unless it was for a substantial amount, it's well worth increasing your excess.

Insurers that don't offer bonuses for life also argue that their claims experience shows the protection they offer is adequate, as most people make a claim on their car insurance only once every four years or so. And they ask who will meet the cost of claims if the customer's premium is guaranteed.

"If a driver keeps having accidents, someone has got to pay for it," says Emma Holyer, a spokeswoman for Direct Line. "So if it's not that particular driver, surely all the other customers must somehow be subsidising them."

Sport
The sun rises over St Andrews golf course, but will it be a new dawn for the Royal and Ancient Golf Club?
sportAnd it's Yes to women (at the R&A)
Arts and Entertainment
Friends is celebrating its 20th anniversary this year
tvSeries celebrates 20th anniversary
Sport
Yaya Touré (left) and Bayern Munich’s Spanish defender Juan Bernat
footballToure's lack of defensive work is big problem for City
Voices
voicesApple continually kill off smaller app developers, and that's no good for anyone
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Sport
Wembley Stadium
footballNews follows deal with Germany
Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Life and Style
life

News
ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

    £320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Head of Audit

    To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

    Audit Manager Central Functions

    To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

    Credit Risk Audit Manager

    Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

    Day In a Page

    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

    Exclusive extract from Janis Winehouse's poignant new memoir
    Is this the role to win Cumberbatch an Oscar?

    Is this the role to win Cumberbatch an Oscar?

    The Imitation Game, film review
    England and Roy Hodgson take a joint step towards redemption in Basel

    England and Hodgson take a joint step towards redemption

    Welbeck double puts England on the road to Euro 2016
    Relatives fight over Vivian Maier’s rare photos

    Relatives fight over Vivian Maier’s rare photos

    Pictures removed from public view as courts decide ownership
    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    ‘Fashion has to be fun. It’s a big business, not a cure for cancer’

    Donatella Versace at New York Fashion Week