Fault claims and no-claims bonuses

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 the policy terms to see what they said. We’ll check whether this 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 that 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 that 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 that 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 that 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 insurers 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 the 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 other person involved in the accident's claim 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 the no-claims bonus.

  Non-fault accidents

  You might report an accident, which you say wasn’t your fault and don’t want to claim. 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 only increase 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 one vehicle at one 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 year.

  This means that you’d leave your insurer with the same no-claims bonus you came to them with – as long as you haven’t got 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 nine years no-claims bonus, but the maximum they apply is four.

  We’d still expect your insurer to provide proof of nine 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 that they will reduce your no-claims bonus by a set amount of years.

  For example, you may have had nine years no-claims, but your new insurer’s maximum is four years. You also have the claim. If their process is to step back to two years, then they would only provide two 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 five years even if you have more no-claims bonus than this. So in most cases, this will mean you getting three 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 two years old, but others may accept less than three years. However, they may only accept three years if they were the last insurer. Some commercial insurers will only accept no-claims bonuses that are less 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 that 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, protected no-claims bonus means that the amount of no-claims bonus you have won’t change if a fault claim is recorded. However, this doesn’t mean that the price is protected, so you may still see your premiums increase when you renew the policy.

  We’ll check the terms and conditions of the policy to make sure that they’ve been applied fairly. If they haven’t, we’ll probably tell your insurer to refund any extra money you paid.