Can a company car insurance claim affect your no claims discount?

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Think you can make a claim on your corporate or company car insurance policy without it affecting your personal no claims discount (NCD)? Well, think again, because company car claims WILL affect your personal NCD.

New research indicates that people with company vehicles and associated insurance cover often admit fault too readily when accidents occur – probably because they don’t think it will affect their personal car insurance policy. But claims of this kind do have an impact on the future cost of personal insurance policies, according to anti-motor fraud specialist Asset Protection Unit (APU).

Using this MoneySuperMarket tool, you can find out how the leading car insurance providers approach the subject.

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Maximum number of
NCD years

With most insurers, the size of discount you can achieve increases until you have built up five NCD years, at which point the maximum discount percentage is achieved. Despite this, some companies continue to recognise if you go further years without making a claim - but they don't increase the size of your discount (or at least not by much).

However, it can still be helpful. If your insurance company recognises up to, say, nine years of claims-free driving and you have an accident, you might lose two years and drop back to seven. As that's still higher than five, making a claim would not jeopardise your discount.

Other companies will always drop you back to three years after an accident, regardless of your number of years claims-free.

Maximum No Claims

The amount of discount earned increases with each year of claim-free driving.

So after one year you might get 30%, with the percentage increasing each year until you get 70% NCD after five years.

Most firms offer a maximum NCD of 70%, although some offer 75% or 80%.

Does it have an
Accelerated Bonus Scheme?

Some insurance companies offer drivers with no NCD an accelerated bonus scheme, which awards a year's NCD after 10 months claims-free driving.

After 10 months, you can either renew with the same firm, or move to another firm with the one-year bonus intact.

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Understand your no claims discount

Fault lines

Neil Thomas at APU said: “Fleet drivers, by their very nature, are most likely to be working and pushed for time when accidents happen on the road, so they are perhaps even more likely to admit fault quickly in order to get on with their day.

“But if they are doing so believing that it won’t impact on their personal insurance, they are sadly wrong and will be in for a big shock when they come to renew.”

This is because the typical insurance policy wording means you have to disclose details of any claims to your personal car insurance provider – failure to do so means you could find any future claims are rejected.

APU, which conducted the research into corporate policy claims, is therefore urging drivers to think twice before accepting responsibility for a smash.

Expense account

While it seems many company car drivers are happy to shunt the cost of a car accident onto their employer, this “the company will pay” attitude is flawed.

More corporate car insurance claims mean corporate insurance premiums going up across the board. Money spent on insurance is money that can’t be invested in the business.

And companies whose drivers accept responsibility for a disproportionate number of accidents will face much higher costs when it comes to renewing their policies.

Boxing clever

APU suggests that affected businesses equip their vehicles with telematics black boxes that use satellite tracking and other records to show what really happened, even when the drivers involved are unsure.

It cites a recent case in which six personal injury claims worth some £32,000 were dismissed after an In-Car Cleverness telematics device contradicted the driver’s account of the accident, for which he admitted responsibility.

Neil Thomas said: “After an accident, determining fault is often complex and is reliant on the drivers’ versions of events. “But telematics technology monitors and reports on speed, time, distance, location, impact angle, g-force, various engine parameters and driver inputs.”

Cash for crash?

The technology should also help companies to spot fraudulent claims made by employees looking to make some extra cash.

“Some drivers simply admit fault because they don’t know that accepting liability on their corporate policy usually hits their own private insurance,” Thomas said.

“Others, unfortunately, accept liability if there is a cash incentive to do so.”

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