You just bought a new car. Congratulations! Alongside buying a new car is car insurance. When thinking of purchasing car insurance, you may be comparing quotes from different providers, but you notice that there is an excess cost on insurance providers. What is the significance of this excess in your car insurance?

An excess is listed in your car insurance policy as a sum of money. In the event that you make an insurance claim, you will be asked to pay the excess as a contribution.

What Is Car Insurance Excess?

Let us define excess in this context. Excess is what you, as the policyholder, are liable to pay in the event of an accident. In most cases, in the event of an accident, you do not pay the excess outright, but it will be deducted from what your insurance provider pays you.

It is commonly divided into two: compulsory excess and voluntary excess.

What’s the difference between voluntary and compulsory excess? 

Compulsory excess is set by your insurance provider and can’t be changed. You do not have control over it. It is the amount the insurer will allow you to pay towards a claim. This is, therefore, non-negotiable. 

New drivers are billed higher because they have a higher risk and most likely to have some claims than older, more experienced drivers. The same is true with high-end cars—they too have a higher compulsory excess payment than the standard model vehicles.

Voluntary excess, as the name implies, is controlled by you—you have the power how much you choose to pay on top of the compulsory excess. Choosing a higher voluntary excess will lower the amount of premium you have to pay because, in the event of a claim, your insurance provider does not have to let go of a big amount. However, you have to make sure that you are able to pay your contribution on time to avoid default.

The amount and types of excess you have to pay will be indicated on your insurance certificate. In the event that you are financially incapable of paying the excess, your insurer has the option to reject your claims. 

If you were involved in an accident that you are not at fault and the other party admits to being responsible, during an insurance claim, whatever amount you paid will be reimbursed to you.

Should I take out excess insurance?

Most of us are struggling financially, and with money quite tight for us, it is a wise move to opt for a higher excess on your car insurance to reduce the cost of your premiums. If you are anxious that you would not be able to pay your excess when you make a claim, then excess insurance can be quite favourable for you.

Getting in an accident is the last thing on your mind, but they do happen. It is always wise to choose your insurance provider to make sure that you are covered in an unfortunate event. Since insurance is a contract, always read the fine lines. 

If you are looking for excess protection insurance coverage in the United Kingdom, contact us at Goodbye Excess.