Excess Insurance Cover Explained
First of all, let’s take a look at what insurance Excess is all about? In this example we will use car excess insurance; It is a legal requirement for motorists on our roads to be covered by some sort of vehicle insurance whether it be third-party, third-party fire and theft or fully comprehensive. The majority of insurance companies will also include some form of excess, but what exactly is this? Excess is an agreed amount of money the policy holder must pay towards making an insurance claim.
If like most insurance policies your policy does include an excess, then your insurer will only cover a percentage of your claim, leaving you with the rest of the bill. Sometimes, this could be as much as hundreds, or even thousands of pounds. Unfortunately, year after year, insurance companies are raising their excess levels higher and higher, leaving us with bigger fees to pay in the event of a claim. For example, if your car excess is £500 and your insurance claim is £6,500, then you will be made to pay the set £500, leaving your insurer to cover the remaining £6,000. Big excesses immediately increase the baseline cost incurred by the policy holder, and these can apply to all kinds of claims, including road traffic accidents, fire damage, and theft.
What is compulsory excess?
Compulsory excess is the fixed amount we talked about above, so the £500 payment. This is the value you would have to pay for every single claim above that sum of money. This figure can vary depending on your age, what car you drive, and how long you have been driving. New drivers and young drivers especially are often made to pay higher excesses due to their increased chances of being involved in an accident due to lack of experience. Expensive cars can also carry a higher excess as they will often be more expensive to repair.
What is voluntary excess?
Voluntary excess is an amount you agree to pay on top of your baseline excess for any claims above this level. For example, if we take the same £500 compulsory excess rate, and the same £6,500 claim, but this time you choose to pay a £250 voluntary excess on top, your insurer will then only cover the remaining £5,750. So, why would you choose to give away extra money like this? Because voluntary excess if often used by consumers to negotiate a better premium. This is simply because the higher voluntary excess you are willing to pay, the less it will cost your insurer, and the lower they can afford to put your insurance premium.
When do you pay the excess fee?
You are made to pay the excess fee in the event of any claim on your insurance policy, even if the accident or damage was not your fault. Therefore, it is important to find a policy containing an excess that you can personally afford. Also, if you agree to a voluntary excess, make sure that is also a sum you can afford in the event of an insurance claim.
No matter what happens later with the costs, you will always be required to pay the excess to start with. If it is proved not to be your fault, the costs will be refunded and covered by the third party.
What next? Choose Goodbye Excess Insurance Protection.
Our standard car excess cover is just one of the many options available. However if you or your family have more than one vehicle, then why not consider our multi-car excess protection, or explore our lifestyle excess cover to protect your home, car, pet and travel insurance policies, all under one convenient policy.