In this blog we try to answer the question: Is it worth buying Motor Excess Protection?
We are all trying to find ways to save money as we want to spend our money on exciting things like holidays, hobbies, entertainment and shopping but the reality is it’s important to watch what we spend our money on when it comes to everyday living expenses like paying your mortgage or utility bills, feeding the household and motoring expenses. If we reduce these living expenses, we will have more money to enjoy ourselves on the luxuries which means we are happier humans and we can live a less stressful life. Insurance is one of those living expenses where everybody would like to save money, sometime it’s hard to justify an expense on a ‘what if’ assessment. Well Motor Excess might well help a little towards these savings.
When answering the question ‘Is it worth buying Motor Excess Protection’, it’s probably best to explain what Motor Excess Protection is first. When you are involved in any motor incident which is covered under your motor insurance, you will have agreed with your main motor insurance provider an amount that you will pay should you make a claim. That means if the total amount of motor incident cost £600 to sort out and you have agreed to pay a £250 excess, your main motor insurance provider will pay the balance of £350 (£600 – excess that you pay @ £250 = £350).
Why do insurers even have ‘excess’, why don’t they just pay the full amount? Over the years Insurance has become more sophisticated and the data it had built is massive. Within that data is the premise that most accidents are small and under a certain amount to fix, so if there was no excess, the costs for repair would be smaller, and much, much more frequent. To the degree that the Insurance would be more expensive as it’s covering everything, including the most common and most frequent, dents and bumps. Most drivers don’t like a small scratch or dent, but the hassle of getting it fixed means they just don’t bother, but if Insurance covered it, they would.
It is important to note that most main motor insurers will ask you to pay your motor excess as soon as you make the claim so you won’t have time to think about how you will find this or whether you can save for it or whether you will have to give up some luxury in order to pay for it, you just have to pay it in order for your claim to progress, without delay.
It is a known fact that Insurance companies have increased premiums higher than inflation rises and it is now the norm for them to also impose higher excesses which can mean that for a relatively minor claim you may end up paying a large amount towards the claim.
Another common aspect is for insurance companies to apply a compulsory and voluntary excess which means you could be paying double the excess although if you pay a higher excess on either or both the compulsory and voluntary excess this will bring the cost of your main motor insurance down as the motor insurer will be paying out less and you more. So this could be where you save money i.e. by increasing your compulsory and voluntary excess combined from say £250 to £500 could save you £50 a year (as an example) on your motor insurance. And the insurance cost of motor excess for £500 is £35 (a year) then you have saved £15 plus you have cover in place should you need to make a claim. So in this example the answer to ‘Is it worth buying Motor Excess Protection?’ would be ‘yes’.
There is no guarantee you will save £50 on your motor insurance however, whatever the saving (and there will be a discount for increasing your excess under your motor insurance), this means you have made a saving of that value as you have put a contingency plan in place in the long run. Insurance is put in place ‘just in case’ and it’s hard to justify until you need it, then you’ll be happy you did. Reducing your insurance by putting higher excess and a voluntary, then adding in cover for that higher excess can still cost you less than you think and less than the initial, low excess coverage. Genius =)
For as little as £24.99 a year, you could buy motor excess insurance, so click on our webpage for more information about our Motor Excess cover. https://bestpricefs.co.uk/excess-insurance/
By the way, we also offer Multi-Vehicle Excess cover and Home Excess cover