Your Car Insurance Premiums

Published with permission from Vero Insurance New Zealand.

Having car insurance helps to avoid big, unwanted costs should your car be stolen or you have a car accident. If you haven’t made a claim before, you could be a little unsure about how it works. Read on below to discover three common questions asked about claiming car insurance.

1. What will an insurance claim cost me? 

When you take out an insurance policy, your excess will be decided depending on the what you decide – the type of cover, your age and your driving background. As with all types of insurance policies, your insurance cover activates after you’ve contributed toward the cost of the damage you’re claiming against – this is what’s called an “excess”.

Before you make a claim, make sure you know what the excess is on your policy. To figure this out, have a look at your policy schedule within your policy documents, and double check the policy wording. You could find there are some instances where you don’t have to pay the excess, which is why understanding the policy terms and what situations your excess applies is a good idea. If you’re unsure on your policy details, you can always talk to your insurance provider or insurance broker.

2. So insurance premiums go up when you make a claim? 

As mentioned above, your insurance premium is dependent on a few different factors specific to you, such as your age, driving background and the vehicle you have insured. Some insurers offer a discount or reduced premium, when you haven’t made a claim. However, if you have to make a claim, it can influence the amount of your premium or any bonuses or discounts, but not always. If you can prove you aren’t at fault for the damage or accident and you can identify the other ‘at fault’ driver.

Insurance premiums are a complicated calculation, however, your insurance broker or provider can help you to understand it.

3. If a car is a write off, what happens to your premiums? 

When damage to a car exceeds or is close to the value of the car itself, it is classed as a write-off, meaning your insurance company has determined it is uneconomical to fix the damage to your car. In this situation, your insurance company will pay an amount for your vehicle, which has been determined in your insurance policy when you took out the insurance, less any excess. Part of the process, when paying out an excess, is your insurer takes over the ownership of your vehicle and possibly any leftover value of your registration.

Bear in mind, if this happens half-way through an annual policy which is paid for monthly/fortnightly/weekly, your premium will not be refunded and any outstanding premium will come off your final payment. The reason for this is because your policy is thought to have been fully used and the annual premium must be paid in full. There are variances between insurers and some insurers may allow any leftover premium to be credited toward the insurance of a new vehicle.

If you want to talk to someone about your car insurance, OverFifty Insurance has access to many different insurers and policies and can help you find one to suit your needs.