When you buy car insurance online, you do so to protect your vehicle from a number of dangers. You make claims after the car has been damaged so that you get financial help from the insurance provider for the repairs. However, you should not raise a claim each and every time there is even a small, little dent on your car. Making small car insurance claims is not the best idea. Read to know why.
Reasons why you should not make a small car insurance claim
Here are the top reasons why making a small car insurance claim is discouraged:
- Affects your driving history: You are seen as a good driver when your vehicle doesn’t get into too many accidents and you do not end up making excessive claims. This helps you in many ways. You are given a car insurance policy in a smoother manner, and your insurance provider looks forward to your association with them. This makes things easier for you in the long run. So avoid making small claims and keep your reputation intact.
- Affects your claim record: Every time you make a claim, it goes on record. At the end of your policy period, the insurer evaluates the number of claims. If it is seen that you made numerous claims, you will be seen as a risky policyholder. Your insurance premium will instantly go up and you will end up paying more money for the next car insurance policy.
- Deductible factor: There is a deductible component in motor insurance. When you buy car insurance online, you promise to pay a part of the claim amount while the insurance provider takes care of the rest. When making a claim, you must see how big the claim is so that even after paying the deductible, there is enough left to receive from the insurer. If not, then making the claim becomes pretty pointless for you!
- NCB factor: The no claim bonus is a very important motor insurance component. You get a reward for not making claims. When you go through an entire claim free year, your car insurance provider offers a discount on the premium of the following year. This is known as the no claim bonus (NCB). The NCB accumulates for every claim free year. This gives you a good financial benefit when you renew your plan. But if you make a claim, you lose all your accumulated NCB. So be judicious with your claims, and to protect your NCB, claim only when there is a real requirement.
- Save for later: If it is a small claim that you are looking to get, remember that later on you may encounter a larger problem and have to make a larger claim. Like a major car accident, your claim limit may have all been over.
- Insurance may deny renewal: When you make too many claims, you are seen as a difficult and fussy customer. At the time of renewal, the insurance provider may not want to continue with you and may deny the renewal. Make fewer claims and remain a pleasant customer to work with.
- Troublesome: Last but not least, it is very troublesome to make so many claims. If the claim amount is small, you can simply pay it out of your own pocket and expedite the entire process and make it simple too.
The bottom line
As you can clearly see from the points mentioned above, there is no benefit that you get out of making small car insurance claims. So be wise, assess the situation, the costs involved and other such factors before you make a claim. If you find the amount is affordable, just pay it yourself and save your insurance cover for something more crucial.