Car insurance is your ultimate wingman, providing a safety net that ensures you don’t get stranded after an accident. In exchange for a premium, the insurer guarantees coverage as specified in your car policy. Think of it as having a superhero by your side, ready to swoop in and save the day.
But wait, before you hit the panic button and file a claim, keep in mind that doing so can impact your insurance premium. So, keep reading to find out about the effects of car accidents on your car insurance premium.
Will an accident increase car insurance premiums?
Unfortunately, YES. When you file a claim, it’s highly probable that your auto insurance rate will shoot up. Plus, you may kiss your hard-earned No Claims Discount (NCD) goodbye. Although, the extent of the damage to your NCD hinges on the nature of the claim you made.
Types of claims
If you’re found to be at fault for a car accident, your car insurance premium could skyrocket at your next renewal.
This type of claim, known as an “at-fault claim,” is added to your insurance history when you’re deemed responsible for the accident due to your negligence – such as hitting another car or damaging your vehicle by colliding with a fixed object. But don’t worry – not all claims will have the same impact on your premiums.
If the accident wasn’t your fault, for instance, you may be able to make a “non-fault claim” without any negative consequences on your rates.
Essentially, this means that the fault lies entirely with the other party involved. For instance, if your car was minding its own business and got hit by a speedster or a rule-breaker, you could potentially file a claim with the other driver’s insurance company. That way, their insurer can take care of your expenses, and you can get back to cruising without any unnecessary stress.
No-claim Discount (NCD)
Your NCD rate will increase over time, which means you’ll pay less for your car insurance premium. But beware, if you do have an accident and make an at-fault claim, your NCD years could take a hit. Consequently, you’ll likely see a basic increase in your premium.
Don’t worry though. You can still benefit from your NCD even if you make a no-fault damage claim or a windscreen claim (with additional cover). Just keep in mind that your NCD is applied after your premium is calculated. So, while it won’t disappear but your overall cost may still go up.
Frequent accidents & summons
If you’ve been involved in a number of car accidents or you have a habit of breaking traffic rules, you’re more likely to be considered a high-risk driver. This means you’ll have to pay higher premiums because insurers see you as a liability. On the other hand, if you’re a safe and responsible driver with a spotless driving record, you can expect to pay less for your car insurance. So, drive safely and watch those premiums drop!
Must you disclose previous car accidents to your insurer?
Well, sorry to burst your bubble, but you have to spill the beans about any previous car accidents you’ve been involved in according to the requirements of your insurance provider. This is regardless of whether or not you were at fault, or if you didn’t file a claim. Don’t forget to include any incidents that occurred while driving a company vehicle.
Keeping quiet about previous accidents is a recipe for disaster, as it can result in your coverage being invalidated. So, to ensure that you’re fully covered, it’s always best to be truthful and upfront about your driving history.
Be cautious when you make a claim
Sometimes it’s smart to make an insurance claim, but be careful not to go overboard! If you start filing too many claims, your insurer might get spooked.
They may jack up your rates or give you the boot when it’s time to renew your policy. So, keep an eye on your claims and make sure you’re only using your coverage when you really need it!
Bjak is one of Malaysia’s biggest insurance comparison sites, with more than 10 insurance brands to choose from. Get your free insurance quote at Bjak today!
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