Make a claim or repair?

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What Car? Staff
20 Aug 2012 10:17 | Last updated: 14 Jun 2018 00:03

Is it worth paying for repairs rather than making an insurance claim?

The no-claims discount offered by insurers can knock up to 75% off your premium if you stay claim-free for five consecutive years.

If you switch to a new company to get a better deal, the huge majority of insures will allow you to bring your no claims discount (NCD) with you. After all, safe drivers who rarely make claims against their policies are the customers every insurer wants.

Undoing your hard work
However, one claim could push your premiums back up to their original level.

The huge majority of us also pay an excess of at least 200 towards the cost of any claim.
If you have a minor accident, it can therefore work out cheaper to pay for the repairs yourself and keep your no-claims discount going rather than asking your insurance company to pay out.

The question is: how much do those repairs have to cost before it becomes a false economy to fork out yourself?

Here, we compare the impact a claim can have on the cost of your car insurance with the potential cost of minor repairs so that you can work out when to use your cover.
When is it cheaper to pay for repairs myself?
How much it costs you to make a claim against your policy will depend on a number of factors.

Firstly, as mentioned above, it will depend how many years of NCD you have built up so far and the excess you pay towards a claim.

Secondly, it will depend on the amount you pay for car insurance every year.

If you have just the one year of NCD, the annual premium reduction you qualify for will probably be little more than 10%. So, say your premium is 700 a year (without taking your NCD into account) that would mean your NCD is worth about 70.

However, if you already have five years of NCD, you may well get a discount of five times this at 350 on your annual premium or more.

You are not likely to see your premiums jump by the latter amount just because you make a claim. In fact, MoneySupermarket research indicates that a policyholder with five years' NCD would pay an average of 130 more a year after making a claim.

However, once you have taken your excess into account, you may well find that it makes more sense to pay for repairs yourself rather than sully your record with your insurer.

This is particularly true if you add in the discounts you will lose in years to come by making a claim.

What about if I pay to protect my NCD?
Once you start to build up an NCD, you can choose to pay a bit more usually around 30 a year to protect it.

The benefit of this protection is that your NCD will remain the same even if you have to make a claim.

That does not mean your annual premium will stay exactly the same if you are involved in an accident, though.

Making a claim still increases the overall cost despite that fact that you still benefit from the same percentage discount.

The difference, however, is that the increase would be much smaller.

MoneySupermarket figures show that the same driver who would pay 130 more due to losing his or her five-year NCD in the example above would on average pay just 10 more a year if they had NCD protection in place.

Having NCD protection could therefore prove a sensible move especially if you would struggle to pay for repairs yourself should an incident occur.

How can I keep costs down after a claim?
Sometimes, of course, there is no choice but to make a claim on your car insurance.

That does not mean you have to accept any premium increases without a fight, though.

Simple steps you can take to cut car insurance costs include reducing the likelihood of theft by installing an insurer-approved alarm and keeping your car in a garage overnight.

However, the simplest way to reduce the impact is to scour the market for the best possible deal.

Insurers do not reward loyalty, but they will still compete for your business even if you have made a claim in the last 12 months.

If your premium rises, the message is therefore to search the market for a better deal you may be surprised by the difference between the quote you are offered by your current insurer and the lowest premium available.

This article has been researched and written by's car insurance partner, MoneySupermarket