Why do we pay excess for insurance claims?
An insurance excess is the bit of any insurance claim you have to pay yourself regardless of who is at fault. It applies to any insurance product whether it’s motor cover, home, pet or travel insurance.
The main reason why insurers apply an excess is so they can eliminate most of, or if not all, of the minor or small claims. The cost to the insurer for the dealing with minor or small claims would only cover the administration charges therefore, they add an excess to the policy to avoid such minor claims. If insurers didn’t apply an access to your insurance your premium would be far higher.
Your excess tends to be made up of two parts; Compulsory excess – this is the amount set by the insurance company that you must pay in the event of a claim; and Voluntary excess – this is an optional amount you can add on top of the compulsory excess to reduce the price of your insurance premium. These two amounts are often combined into one excess amount when you get a quote, but not always so check the policy carefully. For example; if your policy has a compulsory excess of £100 and you add a voluntary excess of £250, you will need to pay £350 if you make a claim. The higher the voluntary excess you choose to pay, the lower your premiums will be, as the insurer won’t have to pay as much in the event of a claim.
Many insurers charge a higher compulsory excess if they feel your circumstances are more risky such as a young drivers or somebody with many driving convictions as they are seen as more likely to be involved in an accident.
Always check your insurance so that you are fully aware of what the cost will be should you have to make a claim.
Paying an excess for a motor insurance claim can be expensive especially with a combination of a compulsory and voluntary excess, but Best Price Financial Services can offer you Excess Protection Insurance which basically refunds the excess that you have to pay in a claim where there is no responsible third party.
Also, should you be involved in a motor accident that is not your fault you will be able to claim your excess back from the person who caused the accident. If you have Best Price’s Motor Legal Protection cover we can claim this for you along with any Loss of earnings, personal affects, Personal Injury.