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What Does ‘Excess’ Mean in Insurance?


Insurance can seem complicated when you haven’t had to take out a policy before, it uses a lot of jargon and terms that to the uninitiated can seem daunting. That’s where Quotezone is here to help, we have prepared a guide for you to get to grips with one of the fundamental pillars of car insurance….excess.
What is car insurance excess? how does excess work? what is voluntary excess on car insurance? read on to find out the answers you’re looking for.

What is excess and how does it work?

Excess is essentially the pre-agreed amount that the claimant (you) will pay to the insurer in order to get your claim moving. This is different to your insurance premium which is the amount you pay to keep your car insured for a given time. For example if you pay £412 a year in premiums your car will be covered in the event of an accident but you will still need to pay the agreed excess amount to your insurer before they process your claim. This applies to all insurance types whether that be third-party or comprehensive unless specifically stated otherwise in your policy.

When do you pay excess on car insurance?

If you make a claim you will need to pay the compulsory excess amount stipulated in your policy in order for your claim to proceed.

What is compulsory excess on car insurance?

Excess is to protect insurance companies from small claims and fraud. For example it’s unlikely that a claim for £50 worth of damage will be made when the excess to be paid is £200. Due to this insurers will require you to pay a compulsory excess when making a claim.

What is voluntary excess on car insurance?

Voluntary excess is the extra amount you volunteer to pay in addition to your compulsory excess in the event of a claim. The benefit of doing this is that your premiums can be reduced if you raise your voluntary excess amount which will save you money in the long run. The risk however is that in the event of you needing to make a claim you will need to pay the compulsory excess as well as the amount you volunteered in your policy.

What affects my excess?

Factors such as your age, driving history and vehicle all come into play when insurers assess your compulsory excess. This can even include the location you live in and where you usually park your car. This is due to how insurers assess the risk of the person making a claim and hence costing the insurer money. A crucial factor that insurers will look at when assessing your excess is if you’ve been involved in an accident before since this naturally makes insuring you seem more risky. If you’re a young driver you are likely to pay a higher excess in the event of a crash as insurers will view you as statistically more likely to be involved in an accident. To save on your premiums it might be a good idea to look into telematic insurance.

What if I’m not at fault for an accident?

You will likely need to pay your excess regardless of who’s at fault, however if the other party admits liability and their insurer will cover the amount of the damage then you can request your excess be returned to you from your insurer. A crash in all likelihood will unfortunately raise your premiums.

What does total excess mean on car insurance?

Your total excess is your combined compulsory and voluntary excess when you make a claim.

Top tips?

  • Avoid making claims or getting into driving accidents
  • keep your car locked in a secure place to reduce the chance of theft
  • Volunteer to pay higher excess if you feel you will not likely make a claim and want to reduce your premiums
  • Don’t admit liability in an accident, tell the other party you need to first speak to your insurance.

This article is intended as generic information only and is not intended to apply to anybody’s specific circumstances, demands or needs. The views expressed are not intended to provide any financial service or to give any recommendation or advice. Products and services are only mentioned for illustrative rather than promotional purposes.

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