In your efforts to find the right insurance policy you’re bound to have come across the term ‘excess’. And, when you did, you possibly wondered what it was, why you should be expected to pay it and how much to go for? All good questions. We’re going to take a few minutes to explain briefly what a Car Insurance Excess is and how it might impact any claim you make. Stick with us, it’s a little complex but it should all make sense when we explain…
Put simply, an insurance excess is the amount an insurance company will expect you to pay if your car is damaged in an accident and you claim against your car insurance policy.
It is most often made up of two components, Compulsory Excess and Voluntary Excess.
Compulsory Excess is an amount set by your insurance provider. You have no control over this amount. It is established based on your perceived ‘risk’.
Voluntary Excess is an amount you can choose to pay on top of the Compulsory Excess. This means for example, if you are claiming damages of £1000 and your insurance company has set your Compulsory Excess at £200, you have selected a Voluntary Excess of £100, then you will be expected to pay £300 in total, with the insurance claim covering the remaining £700.
It’s worth noting that if the damage to your vehicle was caused by an identifiable third party, you will still be expected to pay your excess, but your insurance provider will then seek repayment of this amount through the responsible driver’s insurance company.
The Excess was established primarily to allow insurance providers to focus claims payments on larger, more serious damages. In other words, with an agreed excess you have to pay yourself, claims for very small damages are discouraged. If each small claim was to be handled without Excess Insurance, policy prices would be pushed up and the administrative costs and resulting premiums to drivers would become prohibitive.
When it comes to Voluntary Excess Insurance, you can select how much your policy includes. Choosing a higher excess can bring your premium down in price. While the thought of lower premiums is appealing, it’s important to bear in mind that if you set a high value Voluntary Excess and have to make a claim, you will be expected to pay the full excess amount out of your own pocket.
Some insurance providers offer Excess Protect on your vehicle insurance for a small additional charge. This additional cover allows you to claim back the excess you’ve paid where there is no responsible third party. If, for example, your Excess amounts to £300 and your claim is £500, with Excess Protection, you will be able to recoup the £300 excess you paid so that you are not out of pocket at all.
There are a few peculiarities to keep in mind when it comes to Excess Insurance.
In the case of damage to your windscreen, some policies may or may not require that you pay a smaller than usual excess (indeed some even include cover for this outside your main policy). Insurers appreciate how important it is to resolve a small crack in your windscreen to avoid further, more expensive repairs. Please check your policy for information in this regard.
Abbey Insurance Brokers
Whatever your car insurance needs, our team of experts here at Abbey are waiting to answer your questions. Contact us on 08000 66 55 44 or request a callback.