1 in 4 drivers afraid to claim on their insurance! image

Not only are UK car owners paying through the nose for car insurance, many are now footing the bill for accident damage rather than making a claim on their policy!

Findings from a recent MyVoucherCodes survey found that 24 per cent of respondents admitted to personally covering the cost of damage they had caused to another drivers’ vehicle instead of using their insurance.

With car insurance premiums at a record high, it appears that many drivers are paying for damages out of their own pockets because they are so worried about the effect that a loss of no claims discount will have on their insurance premium!

Another reason that respondents gave for not claiming on their insurance was that the excess (the amount policy holders have to pay before insurers will pay out) was so high that it wasn’t worth claiming on their policy.

Many motorists will opt to pay a higher excess, which can be anything up to the first £1,000 of a claim, in order to get a reduced rate on their insurance premium but research from price comparison website MoneySupermarket has shown that this can be a false economy.

Figures based upon fairly basic driver details have revealed that, on average, an £500 increase in voluntary excess will only generate a saving of £172.63 on the annual cost of an insurance premium.

The difference between paying no voluntary excess and paying £100 makes an annual difference in policy price of just £53.67 whilst offering to pay £500 instead of £100 will save just £58.96 over the life of the policy.

So it is definitely worth checking how much difference a large voluntary excess makes to a policy before agreeing to pay more up front in case of an accident!

The Moneysupermarket findings are as follows:

Excess £0
Excess £100
Excess £200
Excess £250
Excess £300
Excess £400
Excess £500
1 £437.85 £284.93 £263.92 £269.25 £264.98 £253.49 £265.03
2 £451.50 £298.63 £283.70 £282.21 £277.73 £272.51 £271.01
3 £462.00 £302.91 £287.76 £286.25 £285.94 £280.55 £279.02
4 £476.31 £382.92 £356.97 £342.93 £336.90 £312.91 £294.92
5 £505.05 £405.30 £379.05 £373.80 £370.65 £357.89 £339.90
6 £507.15 £411.64 £386.82 £378.25 £373.79 £364.35 £350.41
7 £515.75 £421.05 £399.66 £384.95 £380.29 £368.00 £350.97
8 £517.85 £427.90 £401.95 £387.91 £381.88 £373.80 £357.00
9 £521.00 £442.05 £405.30 £397.95 £389.55 £376.16 £358.05
10 £563.85 £444.24 £429.45 £416.85 £412.65 £406.35 £365.73
Average £495.83 £382.16 £359.46 £352.04 £347.44 £336.60 £323.20

Based on a 40 year old male Teacher driving a 2006 Ford Focus, 10,000 miles per year, living in Manchester M20, car parked on driveway with 5 years No Claims Discount

But, policy excess aside, two per cent of respondents to the MyVoucherCodes survey admitted to paying for the damage themselves as they were not insured on the vehicle they were driving at the time of the accident.

Uninsured drivers are a massive problem for the UK insurance industry which claims that they cost companies up to £500 million per year, a cost that places an extra £30 on the premium of every insured driver.

Obviously, not all of those surveyed admitted to covering the cost of an accident but, of those that had claimed through their insurance, 42 per cent suggested that they would consider avoiding making a claim if they were involved in another accident to avoid an increase in the price of their premium.

And it also appears that a some drivers completely lose their scruples when involved in an accident as one in five drivers that had been at fault for an accident admitted to lying about the details to try an shift the blame onto the other person whilst four per cent admitted to failing to stop or report an accident if the car they had hit was empty!

But failing to stop or report an accident is an offence under section 170(2) of the Road Traffic Act 1988 that carries a punishment of up to six months imprisonment…a much heavier penalty than an increased insurance premium.

The most striking thing about this research is how many people are becoming obsessed over the cost of their car insurance and will do almost anything, including committing a serious motoring offence, to avoid an increase in the price of their premium.

But it’s worth bearing in mind that car insurance costs can be reduced by taking some simple steps such as fitting an alarm, checking annual mileage, minimizing the amount of optional extras on the policy and parking securely.

And always remember that it’s never worth breaking the law to get a few pounds knocked off the price of an insurance policy!