Car insurance excess explained

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What is car insurance excess?

Car insurance excess is the amount you agree to pay towards the cost of any claim you make on your car insurance policy. It is a standard feature of most car insurance policies and is usually split into two parts:

  • Compulsory excess: This is the amount set by the insurer that you must pay towards the cost of a claim. It is a fixed amount and cannot be altered by you.
  • Voluntary excess: This is an amount you choose to pay towards the cost of a claim in addition to the compulsory excess. You can usually choose the amount of voluntary excess you want to pay, and it will affect the overall cost of your car insurance policy.

The total excess payable in the event of a claim is the sum of the compulsory and voluntary excesses. For example, if you have a compulsory excess of £250 and a voluntary excess of £150, the total excess payable would be £400. You would be responsible for paying this amount towards the cost of any claim made on your policy.

Do I pay excess on car insurance if the accident wasn’t my fault?

If you have a comprehensive car insurance policy, you may still have to pay an excess if you make a claim, even if the accident wasn’t your fault. This is because the excess is the amount you agree to pay towards the cost of any claim you make, regardless of who is at fault.

However, if the accident was not your fault, you may be able to reclaim your excess from the at-fault driver’s insurance company. This is known as a third-party claim, and it will depend on the outcome of the claim investigation. If the other driver is found to be at fault, you may be able to recover your excess payment, as well as any other costs that were not covered by your own policy.

What is voluntary excess?

Voluntary excess is the amount of money you agree to pay towards the cost of any claim you make on your car insurance policy, in addition to the compulsory excess set by your insurance provider. It’s a way for you to reduce your car insurance premiums by choosing to pay a higher excess if you need to make a claim.

For example, if you have a policy with a voluntary excess of £250 and you make a claim for £1,000, you’ll pay the first £250 and your insurance provider will pay the remaining £750.

Voluntary excess is optional and the amount can vary depending on the policy and the insurance provider. Typically, the higher the voluntary excess, the lower the car insurance premium. However, it’s important to choose a voluntary excess that you can afford to pay in the event of a claim, as you’ll be required to pay this amount upfront before your insurance provider covers the rest of the cost.

What is compulsory excess?

Compulsory excess is the amount that you must pay towards the cost of any claim you make on your car insurance policy. It is a fixed amount that is set by your insurance provider and varies depending on the type of claim. It is called “compulsory” because you must pay it, regardless of who was at fault for the incident.

For example, if your car was stolen and you make a claim on your insurance policy, you will be required to pay the compulsory excess amount set by your insurer, even if you were not at fault for the theft.

The amount of compulsory excess can vary depending on different factors such as the type of car insurance policy you have, the age and experience of the driver, and the type of car being insured. Your insurance policy documents will detail the amount of compulsory excess you are required to pay.

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How much voluntary excess should I pay?

The amount of voluntary excess you should pay depends on your personal circumstances and how much you can afford to pay if you need to make a claim.

If you are a safe and confident driver and don’t expect to make many claims, you may want to consider a higher voluntary excess to reduce the cost of your car insurance premiums. However, if you are concerned about having to pay out a large amount in the event of an accident, it may be better to choose a lower excess or no voluntary excess at all.

It’s important to keep in mind that while a higher voluntary excess can reduce your premiums, it could end up costing you more in the long run if you have to make a claim and can’t afford to pay the excess. Make sure to carefully consider your financial situation and driving habits when choosing your voluntary excess.

Should I increase my voluntary excess?

Increasing your voluntary excess can be a way to reduce your car insurance premium. If you are a safe and experienced driver and have some money set aside in case of an accident, increasing your voluntary excess may be a good option for you.

However, before increasing your voluntary excess, you should consider whether you would be able to afford the higher excess if you needed to make a claim. If you are in an accident and cannot afford to pay the excess, it could cause financial difficulties for you.

It’s also important to consider whether the savings in your premium are significant enough to justify the increased voluntary excess. You can use car insurance comparison sites like Comparoo to see how increasing your voluntary excess affects your premium.

Ultimately, the decision to increase your voluntary excess depends on your personal circumstances and comfort with risk. You should carefully weigh the potential savings against the potential costs to determine what is best for you.

Why does increasing my voluntary excess reduce car insurance premiums?

Increasing your voluntary excess can reduce car insurance premiums because it shows the insurance company that you are willing to take on more risk. By agreeing to pay a higher voluntary excess, you are effectively reducing the risk for the insurer because you are sharing a larger portion of the potential cost of any claim. As a result, the insurance company may be more likely to offer you a lower premium as a reward for taking on this additional risk.

It is important to note that increasing your voluntary excess should only be done if you are confident that you can afford to pay the higher amount in the event of a claim. If you cannot afford to pay the excess, you may be in a worse financial situation than if you had chosen a lower excess and paid a slightly higher premium. It is also important to consider how much you are saving on premiums compared to the increased excess, and whether the savings are worth the additional risk.

Insurers offer discounts to policyholders who agree to pay higher excesses for two reasons:

  • Low-Value Claims: Agreeing to a higher excess suggests to the insurer that you are less likely to make small, low-value claims, which can be costly for the insurer to process. As a result, some insurers offer discounts to encourage policyholders to opt for a higher voluntary excess.
  • Reduced Payout: If you do make a claim, the amount the insurer has to pay out is lower if you have a higher excess. As a result, the insurer is exposed to less risk and can offer lower premiums. This is because policyholders with higher excesses are essentially taking on more of the risk themselves, and the insurer is only liable for claims that exceed the excess amount.

Can I change my voluntary excess?

When purchasing a car insurance policy, you have the option to set the amount of your voluntary excess. Typically, insurers offer a range of options, usually from £0 to £300 or more, which allows you to choose an amount that suits your needs and budget.

It’s worth noting that you cannot modify your voluntary excess after you have made a claim on your car insurance policy. Therefore, it’s essential to consider carefully and select an amount that you can comfortably afford. By doing so, you can ensure that you are prepared in the event of an accident, without risking financial difficulties due to high excess.

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Can I change my compulsory excess?

Once set by your insurer, you won’t be able to change your compulsory excess as it is calculated based on several factors that determine your risk profile, including your age, driving experience, and the type of vehicle you drive.

For example, if you are a young and inexperienced driver, your insurer may set a higher compulsory excess for your policy compared to someone who has more experience on the road. Similarly, if you drive a high-performance or valuable car, your compulsory excess is also likely to be higher.

It’s worth noting that compulsory excess and voluntary excess are two separate amounts that you’ll need to pay if you make a claim. While you can adjust your voluntary excess amount when taking out a policy, you cannot change your compulsory excess. Therefore, it’s essential to choose a car insurance policy with a compulsory excess that you can comfortably afford to pay.

Can I insure my excess payment?

Excess insurance, also known as “excess waiver” or “excess protection”, is a type of insurance designed to cover the cost of the excess you need to pay if you make a claim on your insurance policy. The amount you can claim is usually set at the outset, and it is often enough to cover both your voluntary and compulsory excess.

It is important to note that excess insurance can only be taken out alongside at least one existing insurance policy, and it can cover a range of policies such as car, home, travel or pet insurance.

To make a claim on your excess insurance, you must first provide evidence that you have made a successful claim on your primary insurance policy. The maximum amount you can claim depends on your policy terms, and it can range from £250 to £1,000 per year.

The cost of excess insurance will depend on the amount you can claim and whether it covers more than one policy. For single-policy excess insurance, the costs typically start at around £30 per year. If you opt for lifestyle excess insurance that covers multiple policies, the cost is often £70 or more.

Compare car insurance quotes

Comparoo is a comparison website that allows you to compare car insurance quotes from over 110 providers. By using Comparoo, you can find the cheapest car insurance policy that suits your needs. With just a few clicks, you can compare policies from different providers and find the best deal.

Comparoo allows you to compare policies based on different factors such as coverage, deductibles, and discounts. This means that you can find a policy that fits your budget and your coverage needs.

On average, Comparoo customers can save up to £334 by comparing car insurance quotes. This is a significant saving that can help you to lower your car insurance costs and keep more money in your pocket.

If you’re looking for cheap car insurance, Comparoo is a great resource to help you find the best deal. With over 110 providers to choose from, you’re sure to find a policy that fits your needs and budget.

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