With Car Insurance premiums becoming increasingly expensive with each passing year, it pays to be prudent and ensure that you do what you can to ensure that your car insurance premiums do not go up needlessly. A common strategy for ensuring that the cost of your policy is reigned in is to protect your no claims bonus by not claiming unless it is necessarily.



While this is the minimum amount of cover the law expects of you, it doesn't cover very much ? for example, if your car is in an accident and gets written off, you would lose the value of your car.

The next step up is third party, fire and theft ? essentially the same as third party but with additional cover if your vehicle is set on fire or stolen. Again, this doesn't provide the kind of cover that would protect the money you have invested in your car and any possessions you are carrying.

The most popular cover is fully comprehensive cover ? which covers the owner in the event of causing damage to a third party, in the event of fire and theft as well as damage to one's car and the damage, and also the loss or theft of any goods from within the car.

The first step to consider when making any kind of claim on your car insurance is what's covered? Not only does the type of policy dictate the nature of your claim but also the specific details of the policy.

For example, does your insurance include replacement locks? Can you claim for personal possessions and if so what items are covered and to what value?

It's worth noting that many people these days have home contents insurance which covers items carried in your car ? check the difference in policy to see which insurance policy is more cost effective to claim with.

There are two primary factors to consider when making a claim ? your excess charge and your no-claims bonus.

- Excess

The excess charge is how much you are willing to pay in the event of an accident. Your insurance provider may set a compulsory excess charge or the excess charge may be voluntary ? whichever the case, the golden rule is the more excess you are willing to pay the lower your premium.

The excess charge can be a major deciding factor in whether to make a claim or not.

In the hypothetical situation that you have an accident that results in ?400 worth of damage, the first ?200 would be covered by your excess and the remaining ?200 would be covered by the insurance company. If your claim is less than ?200 then the insurance company will not pay anything.

So, as long as the claim is more than the excess you should make a claim, right?

Not necessarily ? that brings us on to our next major factor:

- No claims bonus

To some people the thought of losing their no-claims bonus is the stuff of nightmares. It's no surprise ? some no claims bonus policies can save you 65% on your premium if you have five years or more of no claims.

The particular details of your no-claims bonus vary from policy to policy ? with some there is no quarter: if you make a claim, you lose your bonus. With others there is a system of "three strikes and you're out" whereby you are allowed to make two claims within a certain time period but a third would result in your losing your bonus.

There are also protected no claims bonus policies where you can pay an extra premium to protect your no claims bonus so even if you have to make a claim you save money.

Making a claim on your car insurance can become an act of comparing loan and short terms cost against rewards. To make the right decision you need to weigh up, not just the cost of the claim but the effect that claim will have on your premium.