When not to file an insurance claim
Here in Singapore one of the major expenses for drivers is insurance premiums, which we pay every year in order to offset risks, losses, and liabilities. So when traffic accidents happen, submitting an insurance claim seems to be an obvious course of action. After all, it is a chance for you to cash in on some of those hard-earned premiums. However, filing an insurance claim all the time may be a bad move.
More experienced drivers tend to weigh the insurance compensation against the potential loss, such as premium increases, before making their decision. So under what situations should you pay for the car repairs out of pocket? And when should you file an insurance claim? Today, Kwiksure Singapore looks at the types of scenarios where you should think twice before filing a claim.
If you damaged only your own vehicle
If you have damaged only your car and you are not injured, you might not need to file an insurance claim. For instance, if your car has hit a wall but only your car is damaged, you may want to pay for the repairs yourself and avoid facing possible insurance premium hikes.
If you damaged another person’s vehicle/property
If you have caused little damage to a third party’s vehicle or property, and you are sure that no one is injured, you may try to convince that person not to report the incident to the insurer, and settle the compensation privately with him/her. You may ask the other party to sign a legally binding disclaimer waiving all rights to claim, and that the settlement is ‘full and formal’. It is important to note that by settling there is no admission of liability for the accident.
If you’re in an accident that involves another car, and the other driver is at fault
If the damage is minor and you are absolutely sure that no one is injured, you may consider a quick cash settlement for repairs to the vehicle. Yet, in this situation, you will still need a liability disclaimer from the third party so they cannot come back to you with a ‘counterclaim’.
Reasons for not submitting insurance claims
There is also a basket of factors why drivers do not submit claims. But generally speaking, this is because the cost of the damage is less than the potential loss due to consequences such as rate increases.
Avoid losing your No Claims Discount (NCD)
A No Claims Discount (NCD) is the discount drivers receive for every accident-free year. In other words, the higher your NCD, the lower your premium is. Insurers in Singapore use the Boundaries of Liability Agreement (BOLA) to assign fault as a percentage, and if BOLA determines you are more than 20% at fault, you can lose your NCD.
Too many claims may raise your premiums in the long term
Multiple claims will most certainly cost you, particularly if you have other driving infractions on your record. If you are a constant “claimer”, insurers will deem you as a dangerous driver and someone who is more likely to have traffic accidents. They will take this into account when reviewing your annual premium and might impose premium hikes accordingly.
You Have recent traffic violations
If you have violated traffic rules recently, your insurer may not only remove your NCDs but also increase your premiums.
Your excess is high
An excess, a.k.a a deductible, is the amount you have to pay out of pocket before submitting an insurance claim. So if your excess is higher than the repair cost, there is no point in lodging claims at all since you will not receive any compensation.
When SHOULD you file a claim?
While sometimes filing an insurance claim after an accident may not work in your favor, there are indeed some circumstances where you should file a claim:
If someone is injured
If there’s any party injured in a crash, including both drivers, passengers or any passers-by, you should definitely inform the police and file a claim, especially if there’s a chance that you are at fault. Some injuries, such as whiplash, have delayed symptoms that may not exhibit at the scene of the accident. It is better to be safe than sorry as your insurance company may not cover your liability if you do not bring your insurance company up to speed with the situation.
If the fault is unclear
If it is not clear who has contributed to the accident, and the fault is in dispute, you should report to the police so that your insurance company can represent you and the judge will decide which party is at fault. Afterward, your insurer will assign responsibilities and arrange payouts for you.
What should you consider ultimately?
At the end of the day, whether you should file a claim or not varies with each accident. While it is a sensible move to compare the costs of compensation and the potential loss of your NCD, sometimes we do need to submit claims no matter what, such as when someone is injured in the accident.
As an established motor insurance intermediary, Kwiksure Singapore is well versed in helping clients find the insurance plan that best matches their needs. For more features and news pertaining to motor insurance, stay tuned to our weekly blogs.
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