If your car is damaged, claiming the damage will affect the premium and the number of claim-free years. That is why it can sometimes be more beneficial not to claim the damage. When is it better to take the damage for yourself?
Bonus / malus ladder & no-claim discount
Car insurance companies work with a bonus / malus ladder, also known as a “no-claim” discount. For each claim-free year, the insured person rises up the bonus / malus ladder and is rewarded with a premium discount. If the insured claims his damage from the insurance company, he will be “penalized”: he will go down the ladder and will have to pay more premium.
Claim-free years after car damage
The number of claim-free years is the number of years that you are insured and have not claimed any damage from the insurance company. The number of claim-free years is reduced by an average of five after claiming car damage: a significant drop on the bonus / malus ladder. Falling is therefore usually easier than rising.
No-claim protector
Some auto insurance companies offer the option of a no-claim protector. to close. This is an additional insurance that protects the customer against a fallback in no-claim discount. The customer can claim damage once a year, without descending a number of steps on the bonus / malus ladder. However, the no-claim protector does not protect the loss of claim-free years. If you want to switch to a different car insurance company, you will notice that the premium is higher.
Do not claim: pay for damage yourself
In many cases it is more advantageous to take the damage for your own account. When it comes to minor damage, you are better off paying the repair costs yourself. In the event of a fall back on the bonus / malus ladder, the amount of the damage does not matter.
Claim or not claim car damage?
Is it better to claim the car damage or is it better not to claim and keep the no-claim discount?
Example: Els has built up six claim-free years. She has reached step 11 of the bonus / malus ladder and has accrued a no-claim discount of 60%. Unfortunately she hits a pole. The garage owner estimates the repair costs at ?? 500.
If she claims, she will descend an average of 5 steps on the bonus / penalty ladder, regardless of whether it is minor damage. She must then hand in 20 to 25% of the discount. It takes years before it returns to the old level of claim-free years.