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What is Excess in Car Insurance?

29th September, 2022, in Money Saving Tips, Car Hire Help

Insurance, no matter what it is for, is another one of those expenses that you often feel you would prefer to go without. Unfortunately, many of those that do decide to forgo setting up a policy are the ones that come to regret it eventually.

For a relatively cheap fee, you can protect yourself from exorbitant expenses for your home, your car and your health. When you read it like that, it makes sense doesn’t it?

As with many policies for all types of insurance though, there is an excess. The amount you pay towards the quoted repair, replacement or procedure.

The thing is though, as with many financial commitments, it is not quite as simple as that. So, our team at Direct Car Hire Excess have laid it all out in black and white. That way you will never be confused when it comes to making a claim.

Car insurance excess explained

Insurance excess is simply the amount you are required to pay yourself if you need to make a claim. There are normally two types of insurance excess and which one you choose could adjust your premium quite significantly.

Compulsory excess insurance

The compulsory excess is set by your provider and will be the amount you have to pay when making a claim. The amount will be determined by your present circumstances.

So, if, for example, your excess was set at £300, and the repair bill came to £700. You would pay £300 with the remaining £400 being covered by your insurer.

Voluntary excess insurance

Voluntary excess is often the one that stands to benefit you further down the line. This is because it can help reduce your premiums. With voluntary excess, you pay your compulsory excess and then an amount you volunteer to pay on top.  Using the previous example, you would have paid your excess of £300 and then perhaps offered to pay an additional £200. This would leave the insurance company just needing to cover £200.

How do I find out my excess?

With every policy being created on a case-by-case basis, your excess value may differ from the amount many other people have. To find out what yours is, consult your documents. Your insurance policy will contain all the information relating to your payment plan and excess amounts.

Will I always be liable to pay the excess?

This can be a tricky one. In most cases, you will only pay the excess when the issues caused were your fault or you suffered any form of loss. Paying an excess is often a sign of the claim being genuine too. There aren’t many people that would like to spend £300 on a gamble that their insurance claim will be accepted.

You should always choose an affordable excess though. Many people try to push the excess higher so the policy is cheaper. This won’t work in your favour if you have to put a claim in as you may find you cannot now afford the excess.

When do you pay the excess?

To get a claim started, you will need to pay the excess right away in most cases.  Once this is done the process of finding who or what is responsible begins. In other instances, the excess is deducted from the repair bill so you end up paying it at the end. This will vary from policy to policy so you should always consult your documents and liaise with your insurer. If the cost of the repair to your car is less than the excess then you will not be able to claim on the insurance policy.

When do you not pay any excess?

If somebody else claims against you, you will not have to pay any excess. Neither will you when you have Third Party Only insurance.

Do I still pay the excess if it was not my fault?

If the other party have admitted fault and informed their insurer you may find that you do not need to pay any excess. However, in many cases, you will still pay it and then once the fault is proven not to be yours, have it refunded.

For many people though, that excess expense is one they could do without. That is why lots of drivers, especially when hiring a car, take out excess insurance. Driving in a different car, in a different country lends itself to a higher risk of problems. With excess insurance, you prevent those problems becomes excessively expensive.

What is excess insurance?

Where the excess is the amount you pay before your insurance company foot the rest of the bill, excess insurance means that you are protected against these costly excess fees. You will still pay out initially to get your hire car repaired but the excess amount is covered by an excess insurance policy. This means you are never out of pocket.

At Direct Car Hire Excess, for example, we provide holiday car excess insurance as well as worldwide car excess insurance among other policies. This means that wherever you are in the world if you have an accident whilst on work or holiday, you are covered from the excess fees.

Do I need excess insurance?

Excess insurance isn’t compulsory but excess charges on hire cars can be quite high. You will normally be provided with an insurance policy from the hire company. This will be like a standard insurance policy you would take out on your car at home. Meaning, there is an excess attached.  These can vary but have been known to exceed £2000. With the excess insurance policy, that excess no longer becomes an expense you have to worry about.

If you are travelling abroad for work or pleasure, contact the Direct Car Hire Excess team. We provide varying levels of excess insurance cover enabling you to travel with less worry or stress. We can provide you with a free quote today.

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