In taking out a car insurance policy, you are virtually guaranteed to have to agree to an excess. An excess is how much you will need to pay for a claim before your insurer meets the remaining cost. An excess can comprise both a compulsory excess – automatically applied by the insurer – and a voluntary excess, to which you might agree in an attempt to get a lower premium.
Should you have an accident in your car, the payable excess could be dauntingly hefty – for example, because the vehicle has a high value and so could be very expensive to repair. Another possibility is that you have chosen a high voluntary excess due to the more favourable premiums attached. Could an excess protection insurance policy help you to manage the cost of paying an excess?
A rundown of how insurance excess works
If your policy’s excess is £250 and your vehicle has incurred £2,000 worth of damage in an accident, you would need to pay only £250 to the garage which repairs the vehicle under your car insurance policy’s terms. Therefore, your insurer would be responsible for the other £1,750 of the repair cost. In cases like this, paying your share of this repair cost could be very manageable.
However, you might still accept a high voluntary excess, as doing so can reduce the premium. As you would be shouldering more of any future claim’s cost, you would be reducing the insurer’s own potential monetary loss. Therefore, the insurer could consider this – and your presumed willingness to drive more carefully due to the more money you would have at stake – in cutting your premium.
An excess dilemma – but also a possible remedy
Still, while selecting a high voluntary premium can seem a good idea for reducing upfront costs in the short term, it could cause a nasty sting in practice. You can never entirely rule out the possibility of ending up in an accident. If you do end up in one, but it wasn’t your fault, you can claim back the excess from the responsible person’s insurers.
However, this would not be an option if the accident was actually your fault. Therefore, it could be beneficial for your peace of mind if you remember to obtain excess protection insurance before heading onto the road. With an excess protection insurance policy in place, you can be reimbursed for excess – up to the specific policy’s limit – you pay as a result of such an accident.
If you are interested in excess protection insurance, you can take it out as an additional, standalone policy alongside a standard car insurance policy. Rest assured that the premium payable for a policy of this type would not need to be expensive – especially if you source the policy via an insurance broker like Be Wiser Business Insurance. This broker is capable of, on your request, comparing a range of excess protection insurance policies to find one that will be especially cost-effective for you.
How excess protection insurance can help with car hire
If you hire a car while abroad, don’t overlook the need to check that it is suitably insured. Fortunately, the Money Advice Service explains that, while your destination country may legally oblige you to have three kinds of rudimentary insurance, those policies are typically included in the contract and costs for hiring a car in that country.
Those three types of insurance would cover theft of the vehicle, damage to it, and injury or property damage which a third party suffers. However, most car hire firms abroad charge very high excesses between £500 to £1,500. Therefore, it could be wise to buy excess protection insurance before heading abroad, as it would let you claim back excess that you are charged.
When you rent a car abroad, expect the supplier to ask you to use a credit card to make a deposit – unless you have bought the firm’s top-up waiver, The Telegraph explains. Then, if you damage the car while using it, the rental firm will deduct the estimated cost of repair from your deposit that they hold. You could later show your insurer this estimated cost when you lodge a claim.
Author: Oliver Curtis
Hi there. I’m Oliver. I’m just a young boy from the outskirts of… Okay, that’s a lie, I’m not a young boy anymore, although I certainly feel that way at heart.