If you’ve been involved in a motor accident, you may have had a “fault” claim put on your insurance record. You might decide to complain because this has affected your no-claims bonus, otherwise known as the no-claims discount.
Different insurers have different approaches to no-claims bonuses and how they’re applied, so we need to look at the individual facts of each case.
What are fault claims and no-claims bonuses?
For every year of driving without making an insurance claim, a policyholder is awarded one year of no-claims bonuses.
For example, if you’ve been driving for 4 years and haven’t made a claim, you’ll have built up 4 years’ no-claims bonuses.
The more years of no-claims bonus you have, the lower the risk you demonstrate yourself to be to your insurer. This means the insurance quote will be cheaper compared to quotes for other drivers in the same circumstances but with a lower no-claims bonus.
The amount of discount for a no-claims bonus isn’t set; it varies between insurers.
A “fault” claim is recorded when an accident is either:
- the driver’s fault
- not the driver’s fault, but the cost can’t be claimed from another party – for example, if a parked car is hit and the other driver can’t be found
If a fault claim is recorded, it’s likely to reduce your no-claims bonus if you haven’t protected it. This is normally reduced by 2 years, but insurers should explain in their policy how any reduction in no-claims bonus would be applied.
For example, if you had 4 years unprotected no-claims bonus and you have a fault claim, your no-claims bonus will be reduced to 2 years.
Types of complaint we see
You might decide to complain because:
- you’ve lost your no-claims bonus or had a fault claim recorded, but the accident wasn’t your fault
- you’ve protected your no-claims bonus, but your premiums have increased
- you reported a minor accident without making a claim, but your premiums have increased
We also see complaints involving a misunderstanding about how no-claims bonuses work. For example, we hear from people who:
- thought their no-claims bonus could be used on more than one policy at the same time
- didn’t know that their new insurer applies a maximum limit of no-claims bonus and they’ve lost years
- thought their insurer would accept a no-claims bonus that hasn’t been used for a certain number of years
- have a no-claims bonus as a named driver, but didn’t realise this couldn’t be transferred to their own policy
- thought their insurer would accept a commercial no-claims bonus for a private car
- have built up a no-claims bonus outside the UK, and didn’t know their insurer wouldn’t accept this
What we look at
We look at evidence from both you and your insurer to work out what happened.
If there’s been a misunderstanding or confusion about the policy, we’ll look at its terms. We’ll check whether the information was clearly explained to you when the policy was sold, and how clear the sales process was.
Here’s a bit more detail on what we look at for specific complaints:
If your insurer has settled a claim, but the accident wasn’t your fault
If your insurer has accepted liability for an accident, it doesn’t necessarily mean they think you’re to blame. It may mean they’ve considered the evidence and decided to pay out, rather than fight a claim they think they might lose in court.
Your insurer may have accepted liability for an accident without asking you first. Most policies say the insurer can decide to accept liability. But we often find they haven’t always explained this to the customer.
It’s not our role to investigate the accident and decide who’s responsible. But we’ll look at the evidence available to your insurer at the time and check they made a fair decision. This may include things like:
- accounts from you and any other drivers involved
- witness statements
- engineers' reports
- CCTV footage
When a fault claim has been recorded
If a fault claim has been recorded on your insurance record, you may have lost the no-claims bonus you had, or your premiums may have increased.
Where this has happened, we’ll check that your insurer’s decision was in line with the policy terms and conditions. We’ll then make sure it was clearly explained to you that a no-claims bonus would be affected by a fault claim.
If you’ve reported an accident that wasn’t your fault and you don’t want to make a claim, it shouldn’t be treated as a claim by your insurer. However, your no-claims bonus may be affected if they receive a claim from the other driver.
If you’ve claimed for any damage to your car, your no-claims bonus may be affected until your insurer recovers the money from the other driver’s insurer.
Cases involving insurance fraud
We’ve seen complaints from people who say their insurer has paid out for a made-up or fraudulent claim, and they’re worried that their insurance cost will increase because of it.
If we find that fraud was a possibility, we’ll check whether your insurer investigated further before deciding to pay out. If they didn’t, we may say it was unreasonable for them to pay out.
You can find more information about insurance fraud on the Insurance Fraud Bureau’s website.
If you reported an accident without making a claim
If an accident is reported, but no claim is made
Even if you report a minor accident, the report will normally stay on your insurer’s record – for example, if you reversed into your own garage wall but decided to pay for the repairs yourself. They will also record it on the shared industry central database. But because your insurer didn’t have to pay out anything, this won’t affect your no-claims bonus.
You may have reported a car incident without making a claim, only to find your insurance premiums have gone up when you’ve renewed your policy.
The fact an incident has happened, however minor it may be, signals to an insurer that you’re statistically more likely to make additional claims in future than people who haven’t had any incidents.
So, your insurer may tell you to report any incident you’re involved in, even if you don’t want to make a claim. If you don’t, they might cancel the policy or refuse to pay a claim in the future.
If your premiums have gone up after you’ve reported an incident, we’ll ask your insurer to explain why. We’ll also ask whether there was any other reason for the increase.
If you report an accident, but decide to pay the claim of the other person involved yourself instead of making a claim
You may decide to report an incident without making a claim and pay for any damages yourself. In these cases, the claim should be recorded as “notification only”, and there should be no reduction of your no-claims bonus.
You might report an accident, which you say wasn’t your fault and don’t want to claim for. Your insurer should only treat this as a claim if they receive a claim from the other driver – or third party. If they do, it will affect your no-claims bonus until your insurer can work out who’s liable.
If you decide to claim for any damage, it will affect your no-claims bonus until your insurer can recover the costs from the other driver’s insurer.
But a no-claims bonus is only relevant at the annual renewal of the policy. If it’s been found that you weren’t at fault for the accident by the renewal date, your no-claims bonus won’t be affected, regardless of whether the claim is closed or not.
If you’ve made a claim you’re not at fault for during the policy year
An extra year of no-claims bonus is only added if you haven’t had any claims in the policy year. So even if you’re not at fault for a claim, you wouldn’t get a no-claims bonus for that year.
Complaints involving no-claims bonuses when you change insurers
If you insure a second vehicle with a different insurer
We’d expect the premiums on your first vehicle to increase only if your no-claims bonus is transferred to the second vehicle. This is because you will only have one no-claims bonus entitlement, which you can only use on one vehicle at a time.
If you’ve switched insurers mid-way through a policy
Your no-claims bonus will always be a whole number. For example, if you cancelled your policy 11 months into a 12-month policy, you haven’t gone the full year without being involved in a fault incident. So it would be unfair for your insurer to give you a year of no-claims bonus for this period.
This means you’d leave your insurer with the same no-claims bonus you came to them with – as long as you hadn’t had any fault claims.
Proof of no-claims when your no-claims bonus is higher than your new insurer’s maximum
You may go to a new insurer with a higher amount of no-claims bonus than they will accept – for example, if you have 9 years no-claims bonus, but the maximum they apply is 4.
We’d still expect your insurer to provide proof of 9 years no-claims bonus at the end of the policy year, unless they’d always made it clear that they wouldn’t.
If your insurer reduces your no-claims bonus to less than you think it should be
If you change insurer and you have a claim, your insurer may decide to “step-back” your no-claims bonus. This means they will reduce your no-claims bonus by a set amount of years.
For example, you may have had 9 years no-claims, but your new insurer’s maximum is 4 years. You also have the claim. If their process is to step back to 2 years, they would only provide 2 years’ no-claims bonus.
We’d normally say this was fair as long as they made this clear when you took the policy out. If they didn’t, we’d need to think about what effect this had on you and your decision to take out the policy.
Most insurers step-back from 5 years even if you have more no-claims bonus than this. So in most cases, this will mean you getting 3 years no-claims bonus.
We’d usually say it was reasonable for your insurer to give you a letter – if you asked for it – that sets out:
- the amount of no-claims bonus you started the policy with
- their business maximum
- how that’s affected the your no-claims bonus after a claim
How long a no-claims bonus lasts
Each insurer will have their own rules about how long you have had a no-claims bonus for.
Most will accept a no-claims bonus that’s less than 2 years old, but others may accept less than 3 years. However, they may only accept 3 years if they were the last insurer. Some commercial insurers will only accept no-claims bonuses that are less than a year old.
How long an insurer can withhold confirmation of a no-claims bonus if a claim is ongoing
You can cancel a policy and set up a new policy with another insurer whenever you want, even if a claim is ongoing. But the claim will have an effect on the no-claims bonus if:
- the claim is settled in your favour – the reduction should only last until the claim is settled
- the outcome of the claim is that you’re at fault – your insurer should release proof of no-claims bonus, taking off a loss of discount for the claim
We don’t think it’s fair for your insurer to withhold a no-claims bonus you’ve earned. But we might not interfere if they’ve done this because you owe them money.
Complaints involving protected no-claims bonuses
If you’ve made a claim, you may find that your insurance premiums have increased, even though you have “protected” no-claims bonus.
Different insurers have different rules about how the protection applies. In a lot of policies, a protected no-claims bonus means the amount of your no-claims bonus won’t change if a fault claim is recorded. However, this doesn’t mean the price is protected, so you may still see your premiums increase when you renew the policy.
We’ll check the policy terms and conditions to make sure they’ve been applied fairly. If they haven’t, we’ll probably tell your insurer to refund any extra money you paid.
How to complain
Talk to the business first. They need to have the chance to put things right. They have to give you their final response within 8 weeks for most types of complaint. If you’re unhappy with their response, or if they don’t respond, let us know.
Find out more about how to complain
Putting things right
If we think it was unreasonable for your insurer to settle a claim, we’re likely to tell them to change your record to a non-fault claim instead. If we find you’ve been unfairly paying more for your insurance, we’ll also tell them to refund you the extra money.
If we think the insurer’s customer service has been poor, or you’ve suffered any unnecessary trouble and upset, we may also award additional compensation.
Read more about how we award compensation
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