Why Has My Motor Trade Insurance Policy Gone Up in Price When the Open Claim Wasn’t My Fault?

Come renewal time, if you have an open claim you may find that your Motor Trade insurance premium has gone up, even if you weren’t at fault.

Picture the scenario…it’s two months before your renewal date, and you have been involved in an accident. You know the accident wasn’t your fault and your vehicle will need to undergo repairs. Your insurance company has recovered your car, paid for the repairs, your broker arranged for you to have a hire car during the repairs, and solicitors have been appointed to help you claim back your out of pocket expenses such as injury, lost earnings and your policy excess…

You get your car back, and you think the matter is closed, however your Motor Trade renewal notice arrives and the premium has gone up considerably. Your broker may inform you this is because you have lost part of your ‘No Claims Discount’. 

How can a non-fault accident affect your No Claims Bonus? 

Many insurers will take into account all claims when applying your No Claims Bonus to your insurance premium, but only a fault accident means you will lose your No Claims Bonus.

If you have a Comprehensive Motor Trade insurance policy, your insurer will pay for your repairs, and they may have arranged recovery of your damaged car from the scene of the accident, instructed solicitors to handle your injuries and also may have arranged a loan or courtesy car for you. All these things come at an expense to the insurer, which they will pay out on your behalf. Once all these invoices have been received and paid, insurers go through the process of negotiating with the responsible driver’s insurance company, in order to recover all these costs back.

This, however, can take time, more so if the other party are disputing or denying responsibility. Evidence has to be collected and presented, discussions made and in the worst scenarios, the matter could go to court.

The timing of your claim can make a difference to your premium and your Bonus. If you have a claim just after you have renewed, or a few months into your policy, this gives your insurer the maximum possible time for the claims process to fully complete before your next renewal, so you may not be penalised at the subsequent renewal. For those that are unfortunate enough to suffer a loss just before their renewal, this means that the insurers have very little time to negotiate full settlement and finally have the claim treated as ‘non fault’.

Once all these costs have been recovered, many insurers will then treat the claim as ‘non-fault’ and reinstate your NCB accordingly, very often crediting your policy with the increase in premium that the lost Bonus has generated.

If you have a query about a claim and how it has affected your Motor Trade insurance policy, then call us on 0800 221 8077 and speak to our expert team.