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Car Accident: Claim Insurance Or Pay The Damage Cost?

    Renewing Insurance for An Old Car: Here's What You Need To Know

    Road incidents can happen at any time, from light to severe crashes.

    Those who have insured their vehicle may already have the option to claim insurance to cover the repair cost. Insurance claims are the benefits provided to the insured when the repair cost becomes unbearable.

    However, what about a minor accident that causes minimal damage to the car? Should you file a claim or pay with your money?

    Read on as we share more about insurance claims.

    When do you need to claim insurance after an accident?

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    “Accident? Car damage? Just file an insurance claim!”

    Yes, you may file an insurance claim if the coverage is included in your policy. However, please note that the claim records following accidents under certain circumstances will affect your insurance premium in the following years.

    How do you know whether or not an insurance claim will affect your premium? What are the excluded circumstances? Read as we will share more.

    The accident was not caused by you

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    You may file an insurance claim to cover the vehicle’s damage cost in the event of an accident that was not due to your negligence. In this situation, your claim will not affect your car’s NCD.

    “But, I don’t know who is at fault..”

    If you are unsure who is at fault in an accident, you may proceed to inform your insurer first. Most comprehensive insurance plans have benefits for liability defence. Prior to possible legal means, your insurance plan can cover part of your litigation fees.

    In contrast, if you do not file a claim or inform your insurance company, you may not be able to receive such a benefit.

    When your NCD is unaffected

    Say if the accident was not caused by you – you are liable to file a third-party claim or knock-for-knock claim.

    The claim is made against the involved party and not under your policy. That means your NCD and the following insurance premium will not be affected.

    The same goes in case you want to file a claim to repair the windscreen. However, with the condition that you purchase additional windscreen coverage in your car policy. Claiming insurance for a damaged windscreen without the add-on coverage will cause your premium to soar.

    When the accident is involving injuries

    You can predict neither the extent of the injuries nor the medical costs that will have to be incurred as a result of the accident.

    Therefore, you better file an insurance claim or report the incident should it involves any injuries. Skipping this may land you in trouble. You may have to cover the medical expenses or the repair cost yourself.

    As mentioned, most comprehensive insurance plans offer benefits for litigation involving third-party liability (if no exception is included). Consequently, you are encouraged to report the incident to the insurance company rather than just making a police report.

    When you are unable to cover the repair cost

    You may opt for an insurance claim if the repair cost is unbearable. After all, that is what insurance is for, to relieve the financial burden off your shoulder in case of untoward events.

    But, please make sure you report the accident to the police and insurance companies as soon as possible. Putting off the report can cause inconvenience in your claim process. Worst case, your claim may be rejected.

    When do you need to pay for the repair cost yourself?

    If it is a minor accident and does not cause any injuries to another party, you may consider paying the repair cost yourself.

    In addition to saving your time, your NCD will not be affected as well.

    To retain your NCD rates

    No Claim Discount (NCD) is a form of discount that insurers offer if you do not make any claims throughout the coverage period. The rate varies by year, starting at 0% during the first year of car purchase and will reach a maximum percentage of 55% from the sixth year onwards.

    In case of a claim following an accident due to your negligence, please note that you will lose your NCD. The rate will return to 0% in the following year.

    Therefore, if the repair cost is lower than the estimated discount rate that you can get during next year’s insurance renewal, you should refrain from making a claim.

    Although you are footing the bill for your car repair, at least, you get to keep your accumulated NCD.

    To maintain your status as a low-risk driver

    Your risk profile is one of the factors that will determine your insurance premium.

    In addition to age, gender, driving history, and traffic offence record, insurance claims history will also determine whether you are a high or low-risk driver.

    You will be a red flag to insurance providers if you have a high record of claiming insurance. Insurers are likely to view you as a high-risk client, thus, may charge you a higher premium amount.

    Evaluate before opting to claim insurance

    Make sure to evaluate your profit and loss before you want to submit an insurance claim.

    Yes, it is your right to file claims at any time. However, make sure it is worth it.

    Bjak is one of Malaysia’s biggest insurance comparison websites, offering policies from over 10 brands. Get your free insurance quote from Bjak today!

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