RAC Cars News


Company Car Insurance Confusion

By raccars Published

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An anti- fraud company is cautioning company car drivers to be aware of the terms of their private car insurance policies, thanks to a myth that no claims bonuses are unaffected by accidents which take place in company cars. The Asset Protection Unit (APU), a claims investigation firm, has discovered that drivers of company cars tend to accept responsibility in an accident because they mistakenly believe doing so will leave their private car insurance unscathed.

APU has identified a trend for company car drivers to accept the fault quickly and without thinking in an accident, even when they were not to blame, which is leading to an increase in company car insurance premiums. However, APU claims company car drivers are mistaken in their belief that their private insurance will not be affected, and can be in for a shock at renewal time. When asked, applicants must admit to claims made even in a company car.

Furthermore, some company car drivers accept cash in return for claiming liability for the same reasons. However, modern anti fraud technology uses forensic methods and reconstructions to identify fault in an accident, while telematics 'black box' schemes also help insurers to work out what really happened.

There are a number of rules surrounding the no claims bonus policy. This sees insurers reward drivers with discounts if they don't make any claims for a number of years. However, any claims then made see the no claims discount reduced accordingly. Terms vary between insurers regarding the level of discount, how you can protect your discount and how it is affected by claims, so check the small print of your policy carefully, to make sure you understand how it is calculated. Each year without a claim sees a higher level of discount applied, up to nine years in some cases. No claims discounts can be worth as much as 80% of a policy, so it is an important feature to maintain. Customers with long no claims periods will often find their bonus cut by two years if they make a claim.

Some insurers offer the option to pay an extra amount to protect the no claims discount - this means the discount will remain in effect even in the event of a claim. If the discount is not protected, a claim could see the premium rise by 30%. As usual, the key is to shop around and study carefully different insurance providers' terms regarding no claims discounts.

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