Policy excess
A policy excess is the amount that you have to pay towards any claim you make on your insurance policy, i.e. if you have an excess of £100 and repairs to your car amount to £500, you have to pay the repairer £100 and your insurance company pays the residual £400.
Insurance companies impose compulsory excess for:
• Drivers under 25 years of age.
• Provisional license holders.
• High rated vehicles.
These are non-negotiable and in the event of a claim, you are liable to pay the applicable excess to the repairer when you collect your car. If the accident was your fault you have to stand the excess, if it is not your fault you can recover any loss from the driver at fault or his Insurance (using a Legal Protection policy).
To reduce the premium, most people agree to a voluntary excess, £200 is the average excess, which would give an average discount of £20 off your premium.
It makes sense to take a voluntary excess as it is unlikely that you would make a claim for an accident of less than £200, as this would affect your No Claims Discount (NCD) and, therefore, you might as well have the benefit of a reduced premium.
Comments
It may be worth your while considering a larger excess to further reduce your premium:
• Premium over £400, increase excess to maybe £250 to £300.
• Premium over £700, increase excess to maybe £400 to £500.
On larger premiums your No Claims Discount becomes even more important, and therefore you might consider paying larger claims yourself to safeguard it. |
