Question on insurance premium loading
Discussion
Mate of mine has scratched his car up on his gate-post over the Christmas break. Not too serious, but he thinks it could be quite pricey, and was going to phone his insurers today to put a claim in. I've told him his insurance-loading could easily equal the value of his excess again over 3 years, and to hold off for a day.
So - for a fault claim (he's been claim-free for a few years, thankfully), what would the loading be on an ordinary car insurance premium? (roughly) I guessed at around 10%, but does anyone have any better / more informed ideas?
Thanks,
Martin.
So - for a fault claim (he's been claim-free for a few years, thankfully), what would the loading be on an ordinary car insurance premium? (roughly) I guessed at around 10%, but does anyone have any better / more informed ideas?
Thanks,
Martin.
Your guess is about right for a recent (1-3 year) fault accident for a 25-60 year old, although it depends on the other rating factors and the order in which they are applied.
NCD is unlikely to go back to zero. It is often either 2 years step back, but there are other schemes depending on the insurer.
NCD is unlikely to go back to zero. It is often either 2 years step back, but there are other schemes depending on the insurer.
I would put both scenarios into Direct line's (or other insurers) website, and see what difference the claim would make to your premiums, and then multiply the difference by 3 years.
For example, current premium = £500, premium with claim = £650, £150 x 3 years = claim if above £450 with excess...
For example, current premium = £500, premium with claim = £650, £150 x 3 years = claim if above £450 with excess...
Without knowing anything about him car, insuanrce, age, Id say the break even point is probably higher than he imagines.
It's really dependant on his x/s, mine is 500.
Anything <1K I'd never even consider on my insurance (500 from them, 500 from me), <1250 I'd probably just eat too. Getting to around the 1.5K mark, my protected no claims probably sort me out (id still have 4yrs after the claim) and would probably be around my tipping point - I think I'd pay around that 1K from them over the next 5 years in extra payments though, but its easier to eat 500quid than 1.5K.
It's really dependant on his x/s, mine is 500.
Anything <1K I'd never even consider on my insurance (500 from them, 500 from me), <1250 I'd probably just eat too. Getting to around the 1.5K mark, my protected no claims probably sort me out (id still have 4yrs after the claim) and would probably be around my tipping point - I think I'd pay around that 1K from them over the next 5 years in extra payments though, but its easier to eat 500quid than 1.5K.
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