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Resolving a car insurance claim can take time and it could overlap with your renewal date, but how does this affect searching for a new policy?
To help clarify your options, we find out what happens if you have an open claim but need to renew car cover at the same time.
Can I renew car insurance with an open claim?
Yes, you can renew your car insurance even if you have an open claim.
Depending on how complex your claim is, it can take months for it to be processed. For example, if the other party disputes what happens or several people were involved.
During that time, your current car insurance policy might expire but the good news is that you can still search for and compare new policies with other insurers.
Who handles an open claim if I need to renew my car insurance?
The insurer you logged the claim with will continue to manage the process until it’s resolved.
Does switching insurer affect an outstanding claim?
No, switching insurance provider part-way through the claims process should not affect an open claim.
The insurer you were with at the time of the claim will still handle its progress. If you change providers during this time, your new insurer won’t be involved at all.
Do I need to tell my insurer about an open claim?
Yes, you must tell your insurer about any recent claims and any claims that are still outstanding.
In most cases, insurers will ask you about this when you take out a policy so you should be as up-front as possible. Not telling them can be considered non-disclosure which can invalidate your policy. If that happens, the insurer can cancel your car insurance and refuse to pay out if you make a claim.
How do insurers find out about an accident or a claim?
Even if you don’t tell your insurer about an accident, they’ll usually find out from a database called CUE (Claims and Underwriting Exchange).
CUE records all the car, home and personal injury claims made to insurers. The database covers all policies taken out in the UK, the Channel Islands and the Isle of Man.
Will my premium increase with an open claim?
If you’ve got an open claim, it’s likely that your insurance premium will increase until it’s resolved. This is because your insurer will need to work out liability (whose fault it was). Until then, they face the possibility of having to pay out if an accident is considered your fault which is reflected in your renewal price.
If you’re comparing quotes with other insurers, you’ll also need to let them know you have an outstanding claim. This can affect the premiums you’re shown but you might find they’re not as high compared to the renewal price from your existing insurer (as they’re the ones facing the possibility of paying out).
What happens with an open claim if I know it’s not my fault?
Until your claim is settled, and liability can be proven, insurers can’t assume you’re not at fault based on your opinion.
Once your previous insurer settles the claim and can show it was the other person’s fault, you can let your new insurance provider know. They can then adjust your premium based on this new information, which could mean you get a small refund.
Why does car insurance premium increase after a claim?
Almost all claims can increase your premium at renewal. That said, an ‘at fault’ claim typically has a much greater impact compared to a ‘non-fault’ claim.
You might find it's cheaper to switch insurers after a claim. Get quotes below! (Or read more about cheap car insurance companies, including companies offering cover after a claim, here.)
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At fault and non-fault claims explained
At fault claims are when liability rests with you. In other words, the accident was down to you and your insurance provider will need to cover the cost of damage to other people’s property. This increases your premium when you come to renew.
Non-fault claims are incidents caused by other drivers. In this situation, the other person’s insurer will cover your damage costs so the impact to your own insurance provider is minimal.
Non-fault claims can still increase your premium as some insurers believe that if you’re involved in an accident once, you’re more likely to be involved in another. That might seem like a big assumption, but an accident flags your driving habits as potentially risky – for example, if an accident happened on your commute in rush hour, there’s a chance it could happen again.
When a non-fault claim becomes an at fault claim
In some cases however, a non-fault claim can be recorded as an at fault claim if your insurer cannot find the person who caused the damage in the first place. For instance, if you parked your car somewhere and another driver damaged it without leaving their details.
While a non-fault claim becoming an at fault claim feels unfair, it’s your insurer that’s had to pay for repairs; increasing your premium helps them recoup some of that cost.
Do premiums increase if I protect my no claims discount?
Premiums can still increase even if you’ve protected your no claims discount (NCD). That’s because NCD protection only protects the discount you’ve earned; your actual base premium will still increase because of an accident or claim. You can find out why in our guide to why protecting your no claims doesn’t stop your premium from increasing.
How can I lower car insurance after a claim?
If you’re involved in an accident or make a claim, you can expect your premium to increase at renewal. To help keep costs as low as possible, you can:
- Pay for your policy annually rather than by monthly instalments.
- Add an experienced named driver with no history of claims to your policy.
- Keep your car as secure as possible overnight.
- Reduce your annual mileage if possible.
- Compare a range of quotes from different insurance providers.
Plus, if you’re considering changing your current car, opting for one that’s less powerful can help keep premiums down. For more helpful tips on lowering premiums without compromising on peace of mind, take a look at our informative car insurance guides.