How long does car insurance take to pay out in the UK and what factors can cause delays? Unfortunately, there is no one-size-fits-all answer to these questions as each insurance company has its own criteria when processing claims. In some cases, you could get reimbursed in a few weeks, but in others, it can take up to a year.
Here is everything you need to know about the car insurance claims process in the UK.
Car insurance terms and conditions vary among providers as well as the type of cover you choose, i.e. whether you go for the minimum third-party insurance or a comprehensive cover. In general, though, most policies will cover:
Some insurers might even provide additional extras such as cover for driving another person’s car, legal cover or uninsured driver cover (if you are involved in an accident with an uninsured driver and you are not at fault). Carefully check what the policy offers before you buy it.
In some cases, you can even claim for possessions that have been stolen from your car. Keep in mind that your belongings might also be covered by homeowner’s content insurance so check which policy pays out better and make a claim on that one—you are not allowed to claim on both.
You may be interested in: When must your vehicle have valid car insurance?
The time it takes to settle a car insurance claim tends to range from a few weeks to a couple of months, although sometimes it can take up to a year.
These are some of the factors that affect the length of the process.
When you make a claim or report a car accident, the first thing your insurer does is determine who is at fault as this will show who needs to pay for the damages, i.e. your insurer or the insurance company of the other party. How long determining liability takes depends on the extent of the damages and the particular circumstances of the accident.
For instance, when one of the drivers admits they are at fault and there are only minor damages to the vehicles, the claim should be processed and paid out to the policyholder within a few weeks. However, if neither party takes the blame, it can take the insurer months to figure out who is at fault.
Claims that involve multi-vehicle car accidents, hit-and-runs or collisions with uninsured drivers are more complex and take longer to pay out. On rare occasions, the claim might make it to court where a legal representative will manage the claim and the official verdict will decide the outcome.
How serious was the accident? If there are minor damages in a clear-cut case, your insurance claim will be processed faster. On the other hand, even if the claim is straightforward, but the car has been severely damaged, the insurance company may take longer to examine the extent and nature of the damages.
In some cases, the insurer might determine that the car is damaged beyond repair or that the cost of repairs is higher than the value of the vehicle. The insurance company will then declare the car as a write-off and offer a settlement payment to the driver. This typically includes the settlement amount minus the excess you paid, but sometimes the insurer will also deduct the remaining premiums for the rest of the year.
These claims are settled much faster—your insurer should make a settlement offer within a month. You can choose to accept the offer or dispute it if you feel that you are owed more. Either way, you need to notify the DVLA that your car has been scrapped.
Settling claims involving personal injury is likely to take longer than a few months since medical assessments need to be carried out. The amount of the claim is larger too, so insurers will double and triple-check the circumstances of the accident and carry out in-depth investigations, further prolonging the settlement period.
If one of the parties disputes the claim believing they were not at fault, the insurer will need to go over the evidence once again (witness statements, statements from the policyholders, CCTV footage).
If there is not enough evidence to support a claim, it might be a while before relevant proof and statements from witnesses are collected.
The sooner you report the incident, the faster your motor insurance provider can handle the claim.
If you are involved in an incident (i.e. car accident, your vehicle was stolen or damaged) it is best to get in touch with your insurer as soon as possible, preferably within 24 hours.
You need to inform your insurance company of any incident that could lead to a claim, even if you don’t expect to make one as failing to notify your insurer might be regarded as a breach of your policy documents. What’s more, the car could be seriously damaged affecting its value and security, and in turn your car insurance premium.
Remember that even though reporting an accident is not the same as making a claim, the report might still affect the cost of your car insurance premium come renewal time.
Note: in some cases, the insurer might offer a settlement in an effort to resolve the claim faster. This is usually lower than you could receive with a compensation claim so think twice before accepting it.
Here are a few things you can do to speed up the process.
1. Get as many details as you can from the other driver or drivers, such as the name, address, car registration number and insurance details;
2. Take photos or videos of the damages caused to your car. If you have pictures of our vehicle before the accident, they could further support your claim;
3. Ask if anyone else saw the accident if they can act as a witness on your behalf and gather as much info as you possibly can, including names, addresses, and statements;
4. Call the police—an official police report can make it easier for your insurer to determine who is at fault and settle your claim faster;
5. Tell your insurer of the incident as soon as possible—if they have an app, using it to report the accident or theft may be much faster than calling them on the phone;
6. Read the policy documents (including the small print). All insurance policies come with exclusions, so check yours to see if you can make a claim;
7. Don’t lie—tell your insurer if there have been any modifications that could affect your policy or changes to your personal information. If you don’t, they could invalidate your cover;
8. Make sure that all your documents are valid, from your driver’s licence to your MOT certificate and vehicle tax;
9. Cooperate with the loss adjuster. One might be sent to assess the damages to your vehicle, so make sure you are on good terms with them.
Did you know: The average cost of motor insurance is £500 per year, car running statistics report!
Most insurance providers will call you with news on your claim or you can check for updates on their website or app (if your insurer has one). However, if it has been a while (say longer than a month or two) since you made a claim on your car insurance and the process is not yet completed, contact your insurance company and ask about the holdup.
You might feel that the process is taking unreasonably long. In that case, you can take your claim to an ombudsman who will revise the policy, the evidence presented and your insurer’s position and decide whether you should be reimbursed or not.
Yes, according to the Limitation Act 1980, car insurance claims have a time limit of three years. Simply put, if you make a claim three years after the date of the accident (or the date you realised you suffered injuries as a result of a car accident), your insurer is no longer liable to accept your claim.
This means the sooner you make a claim the better. That said, sometimes waiting a while to make a claim is a good idea, especially if you need to gather more evidence or if you are the victim of car theft—the police might be able to find the vehicle in the meantime.
Bear in mind though that some car insurance companies set their own limits regarding certain types of claims, so read your policy documents carefully.
The decision is yours, but before you reach one consider these two aspects:
If you have not claimed in a year or longer, you are entitled to a no-claims bonus which can significantly reduce your premiums when you renew your policy.
If the sum you pay towards a claim is the same or higher than the cost of repairs, it might be better if you pay to fix the damages yourself. For example, if your insurers demand an excess of £500 and the cost of repairs is £400, there is no point in wasting your no-claims bonus and claiming on your car insurance.
If the car accident was partly your fault (and the other driver has admitted liability as well), you could be able to claim under a split liability agreement which entitles you to 50% less compensation.
In general, you can claim your car insurance any time after the start date listed on your policy (this is not the same date as the day you purchased the policy, so check your policy documents).
Every case is unique and each insurance company has its own claims payout process. In general, though, your insurer should present you with a reasonable settlement within three months and payout in less than a year from the date of the incident.
My name is Marija, and I'm a financial writer at DontDisappointMe. Although finance might not be everyone's cup of tea, my 10+ years of working in one of the biggest banks in my country, and my interest in extensive research on everything finance/investment-related, have made me somewhat of an expert in the field (if I do say so myself). No longer having the passion to work in a corporate setting, I decided that I couldn't let all of this knowledge go to waste so I started writing. And, here I am! Today I try to share my knowledge with my audience in the hopes of making this topic as simple and interesting as possible. In my leisure time, I like spending time with my family and travelling to new locations.