Excess insurance is one of the triggers that make policyholders angry with their insurance providers. However, there’s nothing illegal or unfair about it. It’s one of the things that you agreed to pay on claims’ time as you sign the papers for your insurance policies. 

By definition, excess insurance is the bill you have to pay for any claim you make on your policy. For instance, if your claim is £1,000 and your total excess is £500, it will be your obligation to pay for the first £500 while your insurer will pay the other £500. 

The purpose of paying excess insurance is to prevent you from making small claims, such as insurance coverage for dents here and there. It encourages you to pay for the bill or to take responsibility for more minor incidents. 

Excess insurance covers homes, cars, travel, and anything you insured yourself with. In this article, we will answer some of the frequently asked questions about excess insurance. The purpose is to increase your knowledge about the topic and help you decide to get one or not.

Will paying for an excess affect my insurance premium?

Before you pay for any insurance, it will be wise to conduct research about policies with excess. The reason for this is that there is excess insurance that looks cheaper on the onset but will cost you double or triple in the end. If you know what you’re paying for, you will not be fooled into paying more.  

For example, you paid £450 per person on a vacation trip, with an excess that is set at £250 each. Then for whatever reason, four insured people from your policy claimed for cancellation. That will set the total claim at £1,800 with an excess to pay £1,000. That means that the claim payment can only give you £800 back. However, if you looked around and found an excess insurance rate at £100 per person, your claim amount for the four people who cancelled will be at £1,400. 

What is an excess waiver? 

Insurance will protect you from financial loss, but some excesses can be expensive. This is why it is wiser to pay for the expenses yourself than making small claims. Many policies will offer you an excess waiver if you do not want to pay for excess insurance. This will only cost you a little more on your premium. 

When do you pay for excess insurance?

You pay for your excess insurance when you make a claim to cover the damages of say, your car, with repairs that your insurer covers. Meanwhile, you don’t have to pay for excess when there is a third party involved because your excess will only cover your claim. 

 On the other hand, if someone makes a claim against you, you will lose your no claims discount (NCD). This happens when your insurer fails to collect money from the other driver’s insurer. Again, this is the best time to cover your own expenses.  

Do you need excess insurance?

It depends. Sometimes it is not ideal. Nevertheless, if you hire a car, paying for excess insurance can save you a lot of money. That is because car rental companies can apply a £1,000 excess charge when you rent their vehicle. This means that you will pay for any damage up to £1,000. If you have excess insurance, you no longer have to pay for anything.

We hope that all the information about excess insurance here will help you decide whether you need one right now or not. Some scenarios make excess insurance ideal, and some only make it an additional expense that you don’t need to pay.  

If you want to know more information about excess insurance, get in touch with Goodbye Excess to see how we can help!