Are you paying the price for someone else's car accident?

Are you paying the price for someone else's car accident?

September 29, 2010

When you are involved in an accident your no-claim bonus is affected as a result of your bad judgement or wrongdoing. But what happens when it’s not your fault? RateCity looks into what happens to your no claim bonus for comprehensive car insurance.

Myth No.4: If I made a claim for something that wasn’t my fault, I shouldn’t lose my no-claim bonus.

True. Generally this is true but it depends on your insurer and their terms and conditions.
For instance, Virgin Money states that their comprehensive car insurance members won’t lose any of their no-claim bonus when they make a window glass claim, or when involved in a collision that is entirely the fault of the other driver and the driver is identified. For any other claims, they may reduce your no-claim bonus at renewal.
ING Car Insurance also state that your no-claim bonus will not be affected if they conclude you weren’t at fault and if you can provide full details, such as the name, address and car registration of the person at fault. If the claim you made was for damage that was caused by a natural occurring event, such as a storm, then your no-claim bonus will also not be affected.

No-claim bonus explained
No-claim bonus or NCB is the discount given on your car insurance premium as a reward for not making any claims. It is calculated according to the number of years of driving experience as well as your claims history. So for each year you don’t make a claim, your no-claim bonus increases, until it reaches the maximum discount of 60 percent (also called “rating one”).

If you are involved in an accident where you were at fault, once you make a claim your no-claim bonus will basically renew itself so you essentially start from the beginning.

Protect your no-claim bonus
There is a way, however, to protect your no claim bonus regardless of who is at fault.

When applying for comprehensive car insurance, most companies give you the option of protecting your rating. You may have to pay extra to have this included in your policy but basically it allows you to make a certain amount of claims in a specified period without it affecting your rating.

For instance, Budget Direct and Virgin Money both offer protection to customers with top level or rating one no-claim bonuses. This protection allows them to make a maximum of two car insurance claims over three years, with one claim per 12-month policy, or up to two claims over three years without it affecting their rating.

Budget Direct and Virgin Money also offer a rating one “for life” if you don’t make a claim for two consecutive years, which means any car insurance claims you make thereafter won’t affect your no claim discount protection.

Always ask for a product disclosure statement (PDS) to see how your no claim bonus is affected when you make a claim regardless of who is at fault. Or compare car insurance quotes online to see how much it will cost to ensure your no claim bonus is protected.




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Learn more about car insurance

Does insurance cover a stolen car if keys were in the car?

A car insurance policy that covers the theft of your car, such as third party fire and theft insurance, usually covers a stolen car, even if the keys were in the car’s ignition.

However, your insurer may deny the claim if you live in an area where there have been several car robberies reported recently. They will see you leaving the keys in the car as a case of negligence. In such cases, your insurance provider may even expect you to have installed anti-theft security measures in your car. 

You may need to confirm whether or not you left your keys in your car, and if they had been stolen or misplaced, before filing your car insurance claim. The loss or theft of your car keys may be covered by a comprehensive car insurance policy, but usually as an optional item.

If you can confirm that your car keys were stolen, mention this in your claim as this will help establish that your car was not stolen as a result of your negligence.

Can you insure your car for 6 months?

Most Australian insurers won’t offer you a 6-month car insurance policy, so you may need to buy a policy that covers your car for damages and cancel it after six months. You will need to purchase comprehensive car insurance to protect your car from accidental damage, theft, vandalism, or natural disasters.. 

Consider checking whether your 6-month comprehensive car insurance will cost more if you pay monthly or six-monthly premiums instead of a one-time annual premium. Another question to ask the insurer is whether you’ll need to pay administration or cancellation fees when you cancel the policy.

Alternatively, you can look for a suitable ‘pay as you drive’ car insurance policy, which usually offers you the coverage of a comprehensive car insurance policy but only requires you to pay for the distance driven. Such a policy may not be the ideal 6-month car insurance plan as it is based on how much you drive rather than for how long. If you need to drive a lot, you may end up paying more than you’d pay for regular car insurance.