Many drivers consider filing for car insurance more of a pain than a benefit. After all, car insurance comes with monthly payments for higher premiums. The truth, however, is that car insurance is made with a purpose and built with your safety in mind.

In the case that you get into a car accident, having insurance will help you through the hefty bills. Without it, you may have to put repairs on hold as its costs are expensive. However, there are many variables that can influence the cost of car insurance. This includes how much excess you agree to pay. Excess itself can be a complicated topic, but we’re here to cover the basics for you.

What is ‘Excess’ in Insurance Policies?

Excess, for any insurance policy, is the amount you have to pay towards a claim for insurance. Think of it as a way to give you a small portion of the risk with insurance providers in case of accidents, especially for high-risk policies regarding car hire insurances. After paying for the excess, the rest of the expenses will be handled by your insurance.

What is Excess Insurance?

Excess insurance is created to cover the cost of your insurance plan’s excess. For instance, if you are involved in a car accident that results in £750 for repair, your car hire insurance may have a surplus of £500 that you will need to pay. However, excess insurance eliminates the need to make payments out of your own pocket as additional expenses are fully covered by your policy.

With that in mind, there are two kinds of excess insurance:

  • Compulsory Excess – This is a minimum amount given by your insurance provider. You cannot change the costs, and you must pay for it when making a claim. The amount is typically set to reflect your risk level, considering factors like age, claim history, and engine size.
  • Voluntary Excess – On another note, voluntary excess allows you to set the amount of excess you’re willing to pay. Paying a higher voluntary excess amount decreases the price of the policy. People prefer this method as it is an effective way of lowering the cost of their insurance.

Keep in mind that when you make a claim, you have to pay both the compulsory and voluntary excess.

Both types of excess insurance cover a range of policies, including:

  • Car insurance
  • Car hire insurance
  • Van insurance
  • Motorbike insurance
  • Home insurance
  • Travel insurance
  • Pet insurance

Do You Always Have to Pay the Excess?

You are entitled to a refund if you are proven not guilty for the accident. This results in your insurer recovering the full cost from the other party’s insurance provider.

Who Needs Excess Insurance?

Most insurance policies aim to help foot the bill of costs in cases where your vehicle or property is damaged. However, the standard coverage may not fully protect you. In most cases, you will be reliable for the first portion of the excess.

In the case of a car hire insurance policy, this includes paying the excess for windows, tires, undercarriage, roof, and headlights. With that in mind, excess insurance is for anyone who cannot afford to pay for a potentially sizeable bill for your protection.

The thought of getting insurance can be intimidating to many people, which is why most put it on the back burner. As daunting as insurance policies may be, having excess insurance is essential in protecting yourself and your money from worst-case scenarios.

If you’re looking for car excess insurance cover, get in touch with us today to see how we can help!