Pay or claim off the insurance ?

Capt'n Midnight

female, provisional , late 30's, third party insurance, 5 years no claims

At what point is it better to pay out of your pocket, rather than pay back what would be essentially a loan in increased premiums over the next few years ?

payout would be about €1000-1500

Tails142

huh??

your ncb acts as 50-60% reduction on your premium

depends whether your ncb us protected or not, and whether your current premium is high or not

also - how exactly do you have a provisional and 5 years ncb - the mind boggles

Fanboy

Usualy 5yr NCB's are protected for very little...did she opt for it? Sometimes, in the case of a rolling renewal, it is included by default unless the policyholder contacts the company and opts out. Would be worth asking.

Your question all depends on if she has the money handy to pay it. If she does, it would be better for her to have a clean slate. For a payment that small, you're looking at a load of about 15% on the premium, and then the loss of 3yrs NCB too if it's not protected. 5 Yrs is 40 odd %. She will drop down to 2Yrs NCB and will have 20 odd % reduction.

In short: If she has the money, it'd be better to pay herself. Let the insurance company investigate and agree figures with the repairing GRG so as to avoid the other person/garage pulling a fast one.

XJR

Capt'n Midnight wrote:

female, provisional , late 30's, third party insurance, 5 years no claims

At what point is it better to pay out of your pocket, rather than pay back what would be essentially a loan in increased premiums over the next few years ?

payout would be about €1000-1500

Unfortunately you left out the two most important details your current premium and your percentage No Claims Discount. From that you can work out theoretically at least what the loss of bonnus would be.

You also need to know what your insurance company's position is on stepback if your full bonus is 50% what does it step back to after a claim , there are different rules around this and it often depends on the type of claim i.e theft, accidental damage and so on.

The table below gives you a very basic method of calculation and assumes that all other things are equal and only the bonus is changing. The cost of your loss of bonus is what would be ie €500 minus what it is. So if your current bonus is 50% and your premium is €1000 and you step back to 20% after a claim then the cost in the first year after a claim is €300, the second year €200 and so on.

Year € NCD €NCD Diff
1 1000 50% 500
2 1000 20% 200 300
3 1000 30% 300 200
4 1000 40% 400 100
5 1000 50% 500 0

Capt'n Midnight

thanks all , will pass on the info

dingding

Also if you are just claiming on the comphrensive part of the policy you just loose the no claims bonus on the comphrensive part.