How does having an accident affect your car insurance?

If you’ve been involved in a car accident, it’s more than likely to affect your car insurance. Here, we take a look at why and how it can impact your premium, even if the accident wasn’t your fault.

Will my car insurance go up after a car accident?

The short answer is yes. If you’ve been in an accident and make a claim, your car insurance premium is highly likely to increase when you renew. Unfortunately, this is regardless of whether or not the accident was your fault.

How much will my car insurance go up by after a claim?

Any increase in your premium will partly depend on who caused the accident. It will also depend on whether or not your insurer can recover the cost of your claim.

As far as insurers are concerned, there are two types of claim:

At-fault car insurance claims

At-fault claims aren’t quite as clearcut as the name suggests. The first and most obvious type of at-fault claim is when you cause an accident. For example, if you run a red light and hit another car.

Incidents can also be classed as at-fault claims if your insurer can’t establish whose fault the incident was or if they cannot recover their costs. For example, if someone vandalises your car by smashing a window.

At-fault claims will have the greatest impact on your premium when you come to renew your policy.

Non-fault car insurance claims

This is exactly as it sounds. It’s a claim that you make for an incident that wasn’t your fault; for instance, if another car drives into you. In this example, the liability (fault) lies with the other driver.

When you make a claim for repairs, your insurer will then try to recover these costs from the other driver. If your insurer is successful, the event will be logged as a non-fault claim.

Non-fault claims will also affect your premium at renewal but not as much as an at-fault claim will.

Why do non-fault claims affect car insurance premiums?

It might seem unfair that events you had no control over should impact your car insurance but there is a reason for that. For insurers, the fact that you were involved in an accident in the first place suggests that you’re more likely to be involved in another.

For example, if you made a claim because someone hit your car on the morning commute, there’s always a good chance that this could happen again, especially if you regularly drive in rush hour on busy roads in built up areas.

Similarly, if your car was parked outside your house and someone vandalised it in the middle of the night, the risk of it happening again is considered to be greater.

What happens if I’m hit by an uninsured driver?

By law you must have at least third-party car insurance which pays for damage you cause in an accident. Sadly, not everyone abides by this and there are around one million uninsured drivers on UK roads.

If you are hit by an uninsured driver, you should still collect their details at the time of the incident. You should also tell the police that the other driver isn’t insured as soon as possible.

If you’ve got comprehensive insurance, you should be able to claim for damage on your own policy. If you only have third-party cover, you can try to recoup repair costs by claiming with the Motor Insurance Bureau (MIB). The MIB is an organisation that aims to compensate those affected by uninsured drivers.

How long does an accident affect your insurance for?

When you buy car insurance you’ll be asked about any accidents within the last five years. Bear in mind this includes any accidents regardless of the vehicle, so you’ll be expected to mention any incidents in your van or on your motorbike too. You should also tell your insurer about accidents you’ve had while driving a company car.

Do I have to tell my insurer about an accident?

Yes, if you’ve been in an accident, you should tell your insurer.

Even if you don’t want to make a claim, you should let them know but make it clear that this is the case and that your disclosure is for information only.

What happens if I don’t tell my insurer about a car accident?

If you don’t tell your insurer about an accident, it’s called non-disclosure and it could invalidate your policy. That means if you make a claim, your insurer can refuse to pay out.

Having your insurance voided or cancelled can also make it harder to find insurance in the future.

Does a car insurance claim affect my no claims discount (NCD)

Unless you have protected your no claims, your discount will be affected. As a result, the number of no claims years you have is likely to be reduced, typically by around two years. Ultimately, this leads to a smaller discount and a higher premium.

If you’ve protected your no claims, remember that your premium can still rise after you’ve had an accident. This is because insurers work out your premium first (and accidents will usually always increase this) before applying the discount.

Here’s an example of how your premium might look with and without a protected NCD after you’ve made a claim for an accident:

Will my NCD be affected if I’m hit by an uninsured driver?

This depends on the terms set out in your policy. Some insurers won’t penalise you if you’re forced to claim on your own comprehensive insurance because of an uninsured driver. It’s usually called an ‘uninsured driver promise’ so it’s worth looking out for when you compare policies.

Will I need to pay the excess if an accident wasn’t my fault?

Generally speaking, if you need to claim then yes, you’ll have to pay the excess. That said, some insurers may waive the excess if it was a non-fault claim or if you were hit by an uninsured driver.

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