One of our staff here at PayingTooMuch.com, John, recently had an unfortunate incident in his car with a concrete post. When rushing to park at night he reversed his white BMW into a concrete bollard causing the bumper to crack in various places whilst the yellow post left a vertical yellow paint mark on the bumper.
BMW quoted approximately £1250 to paint and fit a new bumper and reflector. However, John managed to arrange a third-party repair for approximately £430. The final finish is truly stunning, and you could never tell the bumper has had a repair.
This goes to show that high quality repairs are often available at a fraction of the replacement cost. However, John could have claimed on his insurance for his little accident and got a brand new bumper. Why didn’t he?
“An insurance claim made no sense”
John said: “Claiming on my insurance would have cost me considerably more money. My insurance excess is £600, so the cost of the claim would have been more than the cost of the repair.”
“That is without considering that I would lose my no-claims bonus and probably pay higher premiums for years to come!”
John is quite right. We’ve calculated that the cost of John losing his no-claims bonus and declaring the incident could raise his renewal price by over 40%. So it is clear that self-funded repairs are cheaper than claiming on your insurance.
And this all makes perfect sense, right? Wrong.
Ronnie Lewry, PayingTooMuch.com’s car insurance expert, gives this warning: “Clearly, for John, not claiming on his insurance made financial sense. However, almost every car insurance policy contains a clause which requires the owner to notify the insurance company of any events to the car, whether you make a claim or not.
“The reason for this is that the damage may impact the safety of your vehicle. As a result of any disclosure, because you have identified yourself as a potential risk, you can expect your premiums to rise.
“As a broker, PayingTooMuch.com cannot condone the withholding of any disclosure of accidents, dents, prangs or scrapes. If anything happens to your car then you should tell your insurer.”
If anything happens to your car, legally you need to tell your insurer, whether you intend to claim or not. Whether you actually tell them is of course up to you. However, if you don’t then your policy may get cancelled or the insurance company may refuse to pay out if you have an accident.
Food for thought…