When it comes to car insurance what is considered to be excess? And why does it matter?
In the insurance world excess is the amount of money that you the policyholder are required to pay towards a claim. So if you make a claim for £500 worth of damage and your excess is £250 you would pay the first £250 and the insurance company would pay the remaining £250.
The excess is there to encourage policyholders to be more careful with their vehicles and to deter them from making frivolous claims. It also means that in the event of a claim the policyholder is not left completely out of pocket.
There are two types of excess – standard and voluntary. Standard excess is the amount that you would have to pay in the event of a claim regardless of who was at fault. Voluntary excess is an amount that you can choose to pay on top of the standard excess which would lower your premiums.
There is no right or wrong answer when it comes to choosing your excess but it is important to strike a balance between choosing an excess that you can afford to pay and one that will deter you from making unnecessary claims.
One final point to bear in mind is that excesses can vary depending on the insurer and the type of policy. It is always worth checking the small print before you take out a policy to make sure you are happy with the excess.
What is the definition of excess in car insurance?
Answer: The amount of money you would have to pay towards a car insurance claim before the insurance company starts to pay out.
How is the excess amount decided?
Answer: The excess amount is set by the insurance company and will be detailed in your policy documents.
Do I have to pay the excess if I wasn’t at fault?
Answer: No you would not have to pay the excess if the accident wasn’t your fault.
What if I can’t afford to pay the excess?
Answer: If you can’t afford to pay the excess you may be able to add on an excess waiver to your policy for an additional cost.
What is the excess waiver?
Answer: The excess waiver is an optional extra that you can add on to your policy which means you wouldn’t have to pay the excess in the event of a claim.
What is the difference between a voluntary and compulsory excess?
Answer: A voluntary excess is an amount of money that you choose to pay towards a claim while a compulsory excess is an amount that is set by the insurance company.
How does the excess work if there are multiple drivers on a policy?
Answer: If there are multiple drivers on a policy the excess will apply to the driver who is at fault for the accident.
What if I have an accident and my car is written off?
Answer: In this case you would only have to pay the amount of your excess up to the amount that the car is valued at.
I’m renting a car does the excess still apply?
Answer: Yes the excess will still apply even if you’re renting a car.
I’m under 25 does this affect my excess?
Answer: Yes being under 25 usually means that you will have to pay a higher excess.
I want to reduce my excess how can I do this?
Answer: One way to reduce your excess is to add on an excess waiver to your policy.
What is the minimum excess I can have?
Answer: The minimum excess that you can have will be set by your insurance company.
What is the maximum excess I can have?
Answer: The maximum excess that you can have will also be set by your insurance company.
If I have an accident how long do I have to pay the excess?
Answer: You will have to pay the excess as soon as the accident happens.
What happens if I don’t pay the excess?
Answer: If you don’t pay the excess the insurance company may not pay out for your claim.