There are no hard-and-fast rules regarding the terms of no-claim bonuses or rate hikes.  What one insurance company forgives, another won’t forget.  But bear in mind: any claim may pose a risk to your rates.  Understanding your policy is the first step toward protecting your wallet.

If you know your first accident is forgiven, or a previously filed claim won’t count against you after a certain number of years, deciding whether or not you should file a claim should become easier. Properly understanding your policy wording long before you need to file a claim is also important, 

Minimizing the number of claims you file is key to protecting your insurance rates from a substantial increase.  A good rule of thumb is to only file a claim in the event of catastrophic loss. If your car is slightly damaged in a fender-bender you may be better off if taking care of the expense on your own but if your car is totalled in an accident, filing a claim becomes a more economically feasible exercise. 

Keep in mind that even though you have cover and have paid your premiums on time for years, your Insurer can still adjust your risk profile by applying higher excesses to future claims, or by agreeing to a limit on future cover. Your Insurer’s final resort will be not to invite policy renewal or issue notice of cancellation.

If you’ve had your cover cancelled and are now struggling to get cover from another Insurer, you should attempt to improve your risk profile,

Once a short-term insurer has rejected you as a client, the financial consequences can be far-reaching. You may find that most insurers won’t want you as a client and those that are willing to take you on, will charge a hefty premium.