Car insurance excess

Car insurance excess is the amount you agree with your insurance company that you are liable to pay in the event of a claim.

The excess varies depending on your age and what type of car you drive.  The higher the risk, the higher you can expect the excess on your policy to be.

Voluntary excess

You may often have the option, however, to increase the excess on your car insurance.  This may work towards decreasing the overall price of the policy because it shows insurers that you are willing to put your own money on the line and therefore less likely to make a claim.  This added to the existing compulsory excess is the amount you would have to pay if you make a claim.

It can be tempting to increase the excess in order to reduce the price of the policy.  However, you can be caught out if you ever do need to claim and you need to make sure that you could afford to pay the compulsory and voluntary excess in the event of this.  If you cannot afford to pay, the insurers may refuse to provide funds for damages.

Why do I need an excess?

Insurers use the excess on your policy in order to disincentivise you from making a claim for minor damages.  With the excess in place, you are less likely to claim as the amount is unlikely to exceed the agreed excess and it is therefore not worth making a claim.

If your excess is £250 and your window needs replacing for £200, there is no point in making a claim as you will have to pay for full damages anyway.

Windscreen excess

Some insurers offer a smaller excess for claims relating to a windscreen.  These are likely less costly claims though will depend on whether or not it needs repairing or fully replacing.

Excess protection

Excess protection allows you to claim back the amount of your excess in the event of a claim.  Although you will initially have to pay the amount, it can be refunded with this simple excess protection scheme.

What if an accident is not my fault?

Similar to excess protection, if an accident is proven to not be your fault, you should be refunded the full amount.  Usually, your insurance provider will be able to claim back your excess from the other person’s insurer.  You do still have to make the initial payment and it can take time to be refunded.

When do I have to pay?

As a general rule of thumb, you will have to pay the full excess in the following circumstances:

When you’re at fault, fire damage or theft.  These conditions may vary depending on your insurer.

An excess is an amount agreed between you and your insurer that you will pay in the event of an accident.  If you increase the voluntary excess, it may reduce your overall premium though you may leave yourself in a sticky situation if you need to make a claim. To find out more about excesses, speak to one of our experts today on 0333 222 4005 or visit our website.   Also, check out this Compare the Market article to find out more.