Picture: 123RF / ANUWAT DONKIEWPRI
Picture: 123RF / ANUWAT DONKIEWPRI

The question of whether to claim for minor vehicle damage from your insurer boils down to the size of your excess payment, your no-claim bonus and whether another vehicle is involved in the accident.

At the heart of the decision to put in a claim for minor dents and scratches is the amount of excess on your policy.

The excess is an amount of money that will come out of your pocket when you claim from your car insurance.

Marius Steyn, technical underwriting manager at Santam, says should the expense of repairing your vehicle exceed the excess amount by only a small margin, you need to consider whether you can afford to carry the repair cost yourself because claims do affect your premiums and the insurer may, if it considers you a riskier client, increase them.

If the repair cost to your vehicle is substantial, you should submit a claim to your insurer because the reason you take out insurance is to transfer the risk, he says.

Sumarie Greybe, co-founder of artificial intelligence-based car insurer Naked, says if you have a low excess - say R1,500 - it could make sense to claim for a typical small scratch or dent, which usually costs in the region of R3,000 to R5,000 to repair. But if your excess is larger - for example, R10,000 - it will probably be bigger than the cost of the repair. So, you could claim and get a small amount or nothing back for your trouble, she says.

Elaborating on the kinds of excess payments due on insurance, the ombudsman for short-term insurance says typically there are standard or basic excess amounts that are set by the insurance company, voluntary excesses which you may agree to carry in addition to the standard excess in return for a discount on the premium, and additional excesses which the insurer charges, for example, in the case of claims in which the driver is younger than 25 and/or when the driver has had a licence for less than two years.

The excess for damage to your windows is usually a lower amount than the standard excess.

To work out exactly what excess you would be liable for when submitting a claim, you need to read your policy schedule, where the excesses applicable should be clearly stated, says Steyn.

Greybe says that when taking out insurance cover, consumers are often tempted to save on premiums by opting for the highest excess amounts. But, she warns, you need to be very sure that you have the cash flow to pay for your chosen excess should you need to claim.

If you are cash-strapped, rather pay the extra R100 per month or so in premiums and have a low excess so that you can claim for the smaller bumps and scratches to your vehicle, says Greybe.

For a 40-year-old woman driving a Polo Trendline, moving from a R1,500 to a R5,000 excess may save only about R100 a month on a Naked policy.

Moving from a R5,000 to a R15,000 excess also saves about R100 a month, she says.

If you have a high excess of R5,000 or R10,000, it is better to obtain a quotation for repairs yourself and then make a decision on whether to submit a claim.

With a low excess of R2,000 or less, it is highly unlikely that the damage repair cost will be lower than the excess. Even a minor scratch can cost you R5,000 to R6,000 to repair, she says.

Was another vehicle involved?

If the accident was not your fault, the other driver might apologise and promise to pay personally without involving insurance companies. You should be careful of accepting such an offer, says Greybe.

You will be on your own without your insurer to fight in your corner if the person does not honour the deal, and it is possible that something that looks like a minor dent on your bumper could hide deeper damage to your car that might be more expensive to repair than either of you anticipated.

If the accident was your fault, offering to settle out of your pocket may also not be a good idea. It could cost far more to repair the other vehicle than you expect or can afford. Additionally, the other driver might try to hit you with unfair claims for additional damage and injury - which is when you'd like to have your insurer at your side, says Greybe.

"I always recommend if your damage is small but another vehicle is involved, that you notify your insurer. Advise the insurer that you are not submitting a claim but you wish to make them aware that there is a third party involved," she says.

There is normally a 30-day period in which you are obliged to report an accident to your insurer for purposes of submitting a claim. However, third-party liability is open for three years, which means another person involved in the accident can come after you some time after the accident, says Greybe.

Typically, many drivers have no idea how to deal with someone who starts hounding them for payment.

If you have comprehensive insurance or third-party liability cover on your insurance policy, your insurance company has a legal team that will deal with that person. You only need to provide your insurer with details of the accident, Greybe says.

Another factor to consider is whether your insurance company offers no-claim bonuses - essentially an incentive not to claim to keep your premiums down.

If you claim, your insurer will look at your claims history and may assess you as a higher-risk customer and increase your premium at your annual premium review. Your premium increase over a couple of years could be higher than the cost of simply paying for the repair of your car out of your own pocket, says Greybe.

Many insurers now offer policies that cover scratch and dent damage with premiums as low as R100 a month. Be aware that such policies cover only up to a small amount, for example, R3,000 per incident.

This does not mean the insurer will pay for the first R3,000 of repairs, but rather that it will pay only if the repair will cost less than R3,000.

If the damage is more than R3,000 your claim will be rejected.

In practice this cover is seldom sufficient to result in a valid claim, since even a tiny dent on a mid-range sedan can cost R5,000 or more to repair, she says.