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Having a bump or a prang in your car is whatever driver dreads, but in the UK, insurance is compulsory which means that in most cases, there is some financial assistance to help you fix or replace your car.

However, if you are a careful driver you may have diligently built up your no-claims bonus over the years in order to try and reduce your insurance premium and resent losing all your hard work in one foul swoop.

If the accident is relatively minor, you may even be wondering whether it is worth claiming on your insurance if you will lose your no-claims bonus as a result.

Here’s a guide about what to expect, and what will happen to your no-claims bonus if you have an accident.

Protected no-claims

Some insurers offer the ability to protect your no-claims bonus. This means that even if you make a claim due to an accident which was either wholly or partially your fault, the amount of no-claims bonus on your policy will remain intact. Some insurers have limits about how many claims you can make in any one policy year before your no-claims bonus is at risk.

No claims – not no fault

In a nutshell, if your insurer is forced to stump up the cash for the accident, the cost will be passed down the line to you and your no-claims bonus will be at risk (unless it is protected). This is the case even if you were not at fault for the accident – for example, you were parked and the victim of an unidentifiable hit and run.

This may seem unfair but the cover is based on no claims, this doesn’t mean if you are not at fault you are protected.

In many cases, to avoid a protracted court case, if the accident is not clear-cut, the two insurers could try to suggest a split liability decision. This means that you are being asked to accept that you were partly to blame for the accident. This means you will have to pay your excess and will also risk losing either all or some of your no-claims bonus. If you are unhappy with this, you can challenge the decision with your insurer. However, a split liability decision is often easier for them and saves them from having to carry out a lot of work. This does not always means it is the right or fair outcome and could mean you lose your no-claims bonus for something that wasn’t your fault. And unlike having to claim after being hit by an unidentified driver, losing your no-claims bonus is entirely avoidable.

Using a solicitor

Unfortunately, you cannot rely on your insurer to act entirely in your best interests. As described above, they can often take a more pragmatic view of the circumstances and if they are not 100% convinced they would win a court case, they may well try and persuade you to accept a split liability decision.

If you opt to instruct a solicitor or pursue a compensation claim, the outcome could be very different. Unlike insurers, your solicitor will be working with your best interests at heart which means that if you weren’t to blame, they will fight for the other insurer to accept liability. You could also find that if you win the case, you are awarded additional costs not taken into account by your insurers, such as personal injury or out of pocket expenses.

Some people feel uncomfortable about the notion of instructing a solicitor or starting a compensation claim. However, this is the reason why insurance is compulsory in the UK and you are not seeking to gain an advantage, just simply to prevent incurring a loss for something that wasn’t your fault.

Many solicitors operate on a no win, no fee basis but a considerable number of insurance policies also include legal expenses cover.

Conclusion

Unfortunately there is no quick answer to confirm whether you will lose your no-claims bonus as a result of a road traffic accident. If your bonus is protected you stand a good chance of remaining unaffected, but if not, you are at the mercy of the insurers. For this reason you may decide to instruct a claims solicitor so you know you stand the best chance possible of keeping your precious no-claims bonus. It’s also advisable to take a look at some accident compensation sites and the services they offer. After all, why should you lose out for something that wasn’t your fault?

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