The question of whether or not to make a claim on your car insurance policy is one that often bothers policyholders on the assumption that they may be better off financially in the long-term if they don't make a claim, if the amount is reasonably small, and by not making a claim they will therefore save money on their car insurance premium in the long-term. This can often apply to minor scratches or problems, that may be your fault or someone else's fault. It may well be something like the loss of an aerial, or even potentially a minor crash with car another where both parties agree that it is in their interests not pursue it further and not make a claim on their own insurance policies.

This thinking is potentially quite dangerous for one very simple reason. If you are a motorist and are involved in any incident that could potentially give rise to a claim under your own policy you are obligated under the terms of your insurance policy to notify your insurance company even if you do not subsequently make a claim. People assume that they only need to notify their insurance company if they intend to make a claim. This is not true. Your insurance company needs to be notified either at the time you actually knew that there had been an incident under the policy which could have given rise to a claim.

This does not mean that the insurance company will automatically charge more tax at renewal, or that you will automatically lose your no claims bonus. It works on a very simple principle that the insurance company use when assessing risk, and the risk involved when deciding to insure you in the first place and at subsequent renewals. The insurance company will assess a risk and as part of that risk assessment they need to know any incident that happened would be considered able to be claimed under the policy.

The position for a policyholder is very simple. If your car or vehicle is damaged in any way in such a state that it could potentially give rise to a claim on the policy you are obliged to notify your insurance company, or your insurance broker if using one. It is then a separate decision whether or not you decide to go ahead and claim under the policy and process such a claim from your insurance company. If you do decide to make a claim, then it is likely that it will affect your renewal premium and your no claims bonus discount that may be applicable to you on your car insurance policy.

If you decide not to make a claim, this will not affect your no claims bonus, but depending on the severity of the incident itself your insurance company may decide to increase your car insurance rate unilaterally. In most instances there will also be a policy excess, which can be quite significant and as such is not worth your while claiming under the policy anyway. Having an awareness of what your policy conditions are and what coverage is available and what your excess is will give you the information you need to have in order to decide whether to make a claim or not.

There is an exception to this principle which is that most insurance companies will allow you to make a claim for your windscreen or windshield if it is damaged or completely smashed without the claim affecting your policy. This is pretty common in the car insurance industry, and is a safety factor designed to allow you to drive safely without it affecting your no claims bonus or the cost of your insurance premium if you do have to make a claim on your policy.