When should you NOT claim your Car Insurance?

Basic car insurance in the UAE provides coverage for accidents, theft and fire and other instances depending upon the insurance providers and the add-ons available on the policy. During an unforeseen circumstance, car insurance will be providing financial security for the insurance holder to bear the damage costs. An important point to note here is, that a car insurance claim cannot be filed for any damage that occurred to the vehicle. There are certain terms and conditions levied on when the policy claim will be accepted and the policyholder must be aware of these. 

There can be several cases where your car insurance policy claim can be rejected like if the driver is under the influence of substances, or driving without a driver’s licence, etc. But even before getting rejected on a car insurance claim, there would be a few cases where one can avoid filing for the insurance claim itself as listed below. 

When the damages are minor

When there are minor damages done to the vehicle it is not recommended to claim the insurance. Though you get covered for the damages irrespective of the level of the damage, this claim would have an impact on the future car insurance premiums. When there is no claim made on the car insurance in the previous year(s) there is a discount provided on the premium value by upto 50%. This is called the No-Claim bonus.    

When the damage repair costs are minor and can be afforded by the insurance holder easily then it is better to pay the bill from your pocket rather than breaking the streak of no-claim made and losing out on the discount. 

For example, if the premium value of your insurance is AED 1200 then not claiming the car insurance in the previous years can give you a discount of 20-50% depending on the number of years you have not claimed. If you have not claimed your policy in the last 5 years then upto 50% off will be provided which can bring down your premium value to AED 600. If this AED 600 is higher than your damage repair bill, then claiming it would be a loss. 

When third-party insurance is available

If the accident is due to a collision of vehicles and you are not at fault then you can make use of the third-party insurance that the third-party driver has. Though it's a cumbersome process, it's recommended to go for third-party insurance. This requires you to file a police complaint and prove that you are not at fault then only after proving, the other vehicle owner will be liable to file the third-party insurance claim and cover your bills. This action would be more beneficial when you have not claimed your car insurance for a longer period say 3 years or more than that and at this point, your no-claim discount on car insurance will be higher and you don’t want to miss out on the big discounts.

When the car insurance deductible is high

There can be certain cases where the car insurance claim amount will be less than the insurance deductible. The insurance provider won’t offer coverage for the entire bill amount and the insurance holder needs to pay the rest from their pocket. This is called Insurance deductible. 

If the insurance deductible is high, that is, the amount you need to clear from your pocket is higher than the claim amount then it's not recommended to claim for the insurance as it would not satisfy your expectation and also affect the no-claim streak. 

Takeaway

These are the major concerns why you should not claim your car insurance. Apart from this, there can be other cases as well which depend on the car insurance holder. Hence while making the claim it is recommended to analyze the situation and see how profitable it can be for you and raise the claim. 

Also, note that all these cases are for the ones who have just damaged vehicles. If the driver or passenger is injured in an accident, it is recommended to claim the insurance coverage as you can’t be sure of the level of the injury and the medical bills can burn a hole in your wallet.