Car Insurance: Many times car owners face unexpected incidents that cause injuries to their car which are trivial or very small in size including small scratches and minor dents on the car’s body. In such a situation, the first question that arises in every car owner’s mind is whether they can opt to use their insurance policy for repairing these scratches or get a repair quote from the agency. They usually get confused between both these options.
However, If you are planning to use your insurance policy to get your car repaired at no cost, this is not a good idea. We suggest you not opt for the insurance claim, instead, you can get quotes for repairs or use touch-up paint. We are saying this because claiming insurance policies leaves a bad effect on your insurance policy and it also negatively impacts your No Claim Bonus (NCB).
What is NCB?
The No Claim Bonus (NCB) is a discount offered by car insurance companies for each year you go without filing a claim. It rewards safe driving and can significantly reduce your insurance premium over time. The longer you maintain a claim-free record, the higher your NCB can go which usually ranges from 20% to 50% depending on the insurer and the number of claim-free years.
Impact of Claiming Insurance for Small Scratches
Unfortunately, filing a claim for even minor scratches on your car can affect your NCB. In most cases, it will reset your NCB back to zero which means you lose out on the accumulated discount and have to start building it up again from scratch. This can lead to a considerable increase in your insurance premium at renewal.
Why Does This Happen?
Insurance companies view claims regardless of their size as an increased risk. They reason that a driver who has filed a claim in the past is more likely to file another one in the future. To compensate for this perceived higher risk they increase the premium for that driver.
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