Types of Car Insurance Excess - 11 Sep 2009 16:53
While insurance companies offer you fixed and variable excess, where the first is a set rate agreed upon by you and the insurer, and the latter is a percentage of the claim, these excesses come in three different sizes. Compulsory, additional and voluntary excess.
Compulsory Excess
Also known as standard excess, compulsory excess is the first amount payable on any claim. It’s either fixed or variable relative to what is being claimed for. It is specified for each area of cover, for example windscreen, window glass, car rental, personal injury or accident damage. Certain areas have higher excesses.
Additional Excess
Additional excess is payable under certain conditions. If you are claiming for accidental damage to your vehicle, you pay your compulsory excess. If the driver of he vehicle was under 25 at the time of the accident, for example, you’ll pay additional excess if you have so elected in your policy. Additional excess is a way you take on more risk yourself, without increasing your compulsory excess. This type of excess reduces your premium.
Voluntary Excess?
This is where you get to decide the amount you pay in the event of an accident. Ordinarily your insurer will give you the minimum amount payable, but you can choose to increase this amount to bring down the amount you pay monthly on your premiums. By taking on more of the risk yourself, your insurer reduces the cost of your insurance. But if you do choose to increase the standard amount, make sure you can afford it, otherwise you won’t receive the full amount of damages you need when making a claim.
Insurers have introduced excess amounts to prevent people from claiming from them especially for small damages that are covered in the excess amount. Although it’s usually a large lump some, it saves you money every month.
While insurance companies offer you fixed and variable excess, where the first is a set rate agreed upon by you and the insurer, and the latter is a percentage of the claim, these excesses come in three different sizes. Compulsory, additional and voluntary excess.
Compulsory Excess
Also known as standard excess, compulsory excess is the first amount payable on any claim. It’s either fixed or variable relative to what is being claimed for. It is specified for each area of cover, for example windscreen, window glass, car rental, personal injury or accident damage. Certain areas have higher excesses.
Additional Excess
Additional excess is payable under certain conditions. If you are claiming for accidental damage to your vehicle, you pay your compulsory excess. If the driver of he vehicle was under 25 at the time of the accident, for example, you’ll pay additional excess if you have so elected in your policy. Additional excess is a way you take on more risk yourself, without increasing your compulsory excess. This type of excess reduces your premium.
Voluntary Excess?
This is where you get to decide the amount you pay in the event of an accident. Ordinarily your insurer will give you the minimum amount payable, but you can choose to increase this amount to bring down the amount you pay monthly on your premiums. By taking on more of the risk yourself, your insurer reduces the cost of your insurance. But if you do choose to increase the standard amount, make sure you can afford it, otherwise you won’t receive the full amount of damages you need when making a claim.
Insurers have introduced excess amounts to prevent people from claiming from them especially for small damages that are covered in the excess amount. Although it’s usually a large lump some, it saves you money every month.