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Incident or accident? The difference could cost you dear

It is one of those difficult decisions of modern life. You have had a minor prang and need to decide whether or not to make a claim on your insurance. If the cost is likely to be below your excess limit then there is no real choice to make, it is simply more sensible to pay cash and move on. If it is a hundred or two more than the excess, then you might have a more difficult decision to make.

It is one of those difficult decisions of modern life. You have had a minor prang and need to decide whether or not to make a claim on your insurance. If the cost is likely to be below your excess limit then there is no real choice to make, it is simply more sensible to pay cash and move on. If it is a hundred or two more than the excess, then you might have a more difficult decision to make. This is clearly a trade off between paying out the additional cash now or making a claim and hoping that it doesn't affect your no claims bonus too much.

At this point many drivers will think that it is a sensible idea to consult your insurance company. After all, who better than they to advise you on the potential impact on your no claims bonus and premiums. It is at this stage though that drivers should be extremely careful. It has emerged that insurers use a database, which was initially intended to combat fraud, to record these 'incidents' and use them to calculate your next premium. Even if you call your insurer to ask for their advice and then decide not to make a claim, this 'incident' is recorded on your file and will be a factor in calculating your next premium. Even if you decide to change insurer, the information will go with you and be accessed by your new insurer.

Even those who think that they have a protected no claims bonus are at risk. The insurer may still allow the maximum no claims discount percentage but simply uplift the basic premium to result in such a driver paying out more regardless of his no claims protection. The information concerning all incidents is recorded on a database called 'CUE,' which is shared by around 60 insurance companies. If a driver wants to check the information held about them, they have to pay a £10 fee.

Association of British Insurers spokesman, Malcolm Tarling, claims that insurance companies have a valid reason for recording such incidents: "If you've had a couple of break-ins to your car for which you don't wish to claim, this may indicate that the crime risk is getting worse in your area and that is something that insurers have to take into account." 

He did concede, however, that these companies should warn of the potential impact of reporting incidents, saying: "We would expect the insurer to make it clear the impact that could have."

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Back to September 2013

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