Have you heard the term car insurance excess but you are not entirely sure what it means? Perhaps you have taken out car insurance recently, but you didn’t fully understand what the excess was when you did it. That’s okay because in this article we are going to explain everything that you need to know about the excess and what it means for you.
What Is Car Insurance Excess?
Car insurance excess is the amount that you have to pay if you make a claim on your insurance. You are only required to pay the excess if any of the damage was your fault and your insurer has to pay to have the car fixed.
Your excess is made up of two parts, compulsory and voluntary. We are going to talk more about voluntary excess later, but the compulsory excess is the amount set by the insurance company that you have to pay if you make a claim.
How Does Car Insurance Excess Work?
When you make a claim on your insurance, there will be a number of things that your insurance company will want to know. They will ask things like “who’s fault was it”, “how damaged is your car” and many other questions.
After this, it will be determined how much everything is going to cost, and you will be sent a bill for the excess. You have to pay the excess, or your insurer might refuse to pay for the damage. Or, they might take the excess amount out of the total and pay you what is left.
How To Adjust Your Excess To Decrease Premiums
Something that you can do to decrease your premiums is to adjust your excess.
Like we mentioned before, your excess is made up of two parts, compulsory and voluntary. We’ve already discussed compulsory, but this is where the voluntary could be beneficial to you.
Voluntary excess is an amount that you have volunteered to pay if you make a claim. There are certain pros and cons to doing this, but it does bring down your insurance premium. This will make your insurance more affordable.
When you make a claim, your voluntary and compulsory excess will be added together to get your total excess value, and this is what you are going to have to pay.
Risks And Advantages
You might take out a voluntary excess of £1000 because you think that it is unlikely that you will need to make a claim. Depending on your price of cover, a voluntary excess might be a good idea because it can save you money on your actual insurance.
However, if you do have to make a claim, you might not be able to pay the excess, and your insurance company can then refuse to pay you anything. So, you need to be careful with something like this because there are risks that come along with it.
Also, you might think that taking out the voluntary excess is going to be a good idea because of how much it saves you. But, you might find that when you make a claim, you end up worse off than if you would have had a £0 voluntary excess.
We hope that you have found this article helpful and now understand what car insurance excess is and how it works.
