What is car insurance excess?
Excess on your car insurance is the fixed amount you must pay when you make a claim. Any amount left after the excess has been paid, your insurance will cover. Insurance excess is included in all policies to prevent motorists from claiming for every little scratch and dent. Insurers don’t want to be paying out for a small crack in the windscreen, so creating an excess that is most likely to be more than the claim would deter people from putting the claim in. On some occasions, if the incident has been found to be someone else’s fault, the insurer might waiver the excess and pay-out the whole sum. But, not all policies do this so check your own before assuming this.
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What does compulsory excess mean?
Compulsory excess is the initial amount you have to pay when you make a claim which is chosen by the insurer. They choose the fixed price based on how much chance they think you have of making a claim.
Motorists who are categorised as being risky drivers, such as young drivers, often find they have to pay more than experienced drivers. Inexperienced drivers are more likely to be in an accident, in fact, 20% of new drivers are involved in a collision in their first year of driving. So, it’s not surprising that insurers charge more for their car insurance policies including the excess. Those opting for a business insurance cover can also be considered as a risk as they are on the roads more often with more chance of being in an incident.
Another reason your compulsory excess could be more expensive than others could be down to your car. The value of your car can affect your excess just like it can your premium. Therefore, the more expensive the car, the more you might have to pay-out.
What does voluntary excess mean?
If you’re really looking to reduce how much you’re spending on fuel and the amount of carbon emissions you are producing, you may wish to consider cutting down on day-to-day driving too. It can also help to retain as much of the car's value as possible when it comes to selling your car by reducing the mileage, one of the key influencers in depreciation.
Voluntary excess is the extra excess that you must pay when you make a claim, but this time you decide how much it is. You have the choice of how much voluntary excess you add on to your car insurance policy. The more you add on, the cheaper your premium. However, if you have to make a claim you do then have to pay this excess, on top of the compulsory excess before the insurer will pay-out the rest.
How much voluntary excess should I pay?
Deciding how much voluntary excess you want to add on to your policy is up to you. It can be seen as a game of chance; the more confidence you have in your driving skills and believe that your chance of causing a collision is limited the more voluntary excess you can add to your policy. But, if you’re not sure and don’t want to take the chance, then you can limit how much you pay, but your premium will rise.
Other ways to reduce your car insurance
If you think you are a safer driver, adding extra voluntary excess on to your car insurance policy is a great way to reduce your premium. But, there are also other ways you can adjust your policy to do this at little or no cost.
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Protect your no claims bonus
Each year you drive without making a claim, more money will get knocked off your car insurance premium. But, as soon as you make a claim your record is tarnished and your premium will rise again. If you’re willing to pay a small fee to protect your no claims bonus and the day comes when you do have to claim, your good driving history will remain and you won’t get hit with a large insurance bill when it comes to renewing your policy.
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Adding a named driver
If you know an experienced driver, particularly one with a good driving history that you can add to your policy then this is an easy way to bring your premium down at no extra cost.
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Alter your job title
This doesn’t mean completely change your occupation, it simply means play around with different titles that describe your job role. Some titles cost more than others even though they do the same job. But, make sure you don’t stray too far from the truth and mislead your insurer as this is illegal.
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Fill out the form correctly
As simple as it sounds, filling out your policy correctly can affect the cost of your premium when it comes to paying-out after a claim and the insurer discovers you’ve misled them. This includes the value of your car, your occupation and where you live. One mistake and it could cost you.
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Compare insurance policies
There are so many policies out there and there is bound to be one that works best for you. Read the T’s & Cs and find out all the extra cover they provide, the hidden costs, and what excess they are charging.
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