Consumer Corner: I had a tip in my car - is it cheaper to go through insurance or pay myself?

Insurance agent inspects the damage on the car

It is one of those things that most drivers dread. The sound of a scrape or a bang when you are pulling into a parking spot or reversing out of a tight space. 

It’s those little ‘tips’ that can cause frustration and anxiety and knowing what to do afterwards can be tricky. We always hear about not touching your ‘no claims bonus’.  Protect it at all costs. 

However, when is a good time to actually claim from your insurance or when should you pay from your own pocket?

Garrett Walsh of the insurance company 123.ie says that making a claim is usually advisable when severe damage or injuries occur.

“Car repairs don’t come cheap, and if you need to fork out thousands of euros to get the car back on the road, a claim certainly makes sense.”

However, he says that for minor damage, the situation is a little different.

“You can claim by all means, but you need to weigh up the implications of doing so vs taking the hit and paying for the repairs yourself or just leaving it.”

He does say that you should report all incidents to your insurance company but before making a claim, you should carefully evaluate the extent of the damage and estimate repair costs.

“If damage is simply a scrape down the side, which could be repaired with a second-hand part, it might make sense not to claim and pay out of pocket,” he says.

“Think of the big picture. Consider total loss, including increased premiums and loss of no-claims bonus, versus repairable damage and cost.”

He points out how it is difficult to gauge how much premiums will rise after a claim, but says that Compare the Market sets it at between 20% and 50% in Ireland. 

Also, he says you should also take into account the loss of the no-claims bonus, which could equate to a sizable 50% reduction per month if kept intact for five years or more.

Paul Walsh of Peopl Insurance agrees and says that no matter how small the car crash it is crucial that you contact your insurer when you are involved in any collision.

He says that understandably many drivers don’t wish to go through their insurance if there’s only minor damage, particularly if they might lose their no-claims bonus by doing so.

“However, even if the damage is minor and you plan on paying for it yourself, the other driver may bring a claim in the future. The other driver may also insist on going through their insurance,” he says.

Mr Walsh says that if you are in a minor collision for which you are at fault and there’s a tiny amount of damage such as a tip or scratch to your car or another’s, even if you mention it to your insurer, it may still be an option for you to cover the cost of the damage yourself without making a claim or affecting your no-claims bonus.

“Even a seemingly minor accident could be followed by a substantial claim, particularly if anyone has been injured, so it is always safer to notify your insurer,” he says.

One of the big reasons, of course, is not climbing from your insurance if you have a tip is that it would affect your no-claims bonus. 

According to Citizens Information a ‘no claims bonus’ refers to how most insurance companies offer a discount to motorists with a claims-free record. They said the ceiling for a no-claims bonus is usually around 60%, which can obviously result in big savings.

Sarah Rigney of Bonkers.ie points out that driving comes with certain risks, and no matter what your driving experience is, being involved in a crash can leave you shaken and stressed.

She says however that if you were involved in an accident you should contact your insurer and inform them that there has been an accident. 

After that, the course of action you choose to take will depend on whether you are at fault or not. If the accident wasn’t your fault, you can claim directly from the other driver’s insurer or you can claim from your own comprehensive policy.

“If you choose the second option, your insurer will recoup its costs from the third party. You should note, however, that until your insurer recovers any money it has paid out, the incident will count as a claim. 

"As a result, your no-claims bonus could be temporarily affected and you’ll have to pay your policy excess. If the accident was your fault, you must inform your insurer as soon as possible. They can look at how to cover any costs that are owed to third parties,” says Ms Rigney.

She says that before you decide what to do your insurer will explain how the accident will impact your insurance and your policy.

Also, Mr Walsh says that you should never assume responsibility for an accident when on the scene as even a simple apology could become an issue when it comes to making a future claim.