If you’re new to the world of driving, you’re probably also new to the world of car insurance. That probably means you’re encountering a whole new world of concepts and terminology. Premiums, policies, third party, excess – what does it all mean?
That last one, excess, might be the most confusing of all for young drivers and new drivers. So let us answer your most pressing question – what is excess on car insurance?
This is absolutely something you need to familiarise yourself with. If you’re ever involved in an incident, your excess will become vitally important, but beyond this, an open-minded approach to your excess might even help you to pay less for your car insurance overall.
What Is Insurance Excess?
If you’re ever involved in an incident, you will need to report it to your insurers and you may have to make a claim on your car insurance. If you make a claim you’ll have to pay a contribution towards the full cost of your claim. This contribution is called an excess.
The size of your excess will depend on a number of things. The car you drive plays a big part, as some cars cost more to insure and, therefore carry higher excesses than others. Your age is also important as is the value of your vehicle.
If you’re aged between 17 and 24, you’ll have to pay young driver excess on top of the standard excess. The standard excess includes claims for Accidental Damage, Malicious Damage, Fire & Theft. Again, the size of the young driver excess you pay depends on a number of factors, including the age and the value of your car.
The most important thing to remember about excess is that you’ll only have to pay it if you ever make a claim on your car insurance. A lot of the time, you won’t be expected to pay the excess as a separate amount. Instead, the sum will be deducted from the total settlement you receive.
What is Voluntary Excess and Can It Really Reduce Car Insurance?
You can volunteer to pay additional excess on top of the standard excess and, if applicable, the young driver excess.
You can offer to pay as much or as little voluntary excess as you want. But offering to pay voluntary excess can sometimes help to reduce the amount you pay for your car insurance.
But just remember: If you’re ever involved in an incident, you will have to pay your voluntary excess! Never volunteer more than you can actually afford as the amount you save could be significantly lower than the amount of excess you have to pay.
An unrealistic approach to voluntary excess could also leave you short of the amount of money you need for repairs. Let’s say you’re facing a £1,000 repair bill. If your total excess including any standard compulsory excess is £500, you’ll only get £500 from your insurer. Would you be able to find an extra £500 to pay for those repairs?
Bit of a risk, isn’t it? Voluntary excess could make a difference to the amount you pay on your car insurance. But be realistic and think in the long-term – the most important thing is that you have the cover you need, and offering more voluntary excess than you can afford might take away your safety net.
What Is Excess Insurance?
This is where things can get complicated. Excess insurance can cover the cost of your excess up to an agreed limit if you ever have to make a claim.
You get to choose the upper limit of your excess insurance, but the more excess you want to cover, the more you’ll have to pay for your car insurance premiums.
Some drivers take out excess insurance because they’re worried they won’t be able to afford to pay their excess if they ever make a claim. But this does not mean that you can take out excess insurance to cover a higher voluntary excess. Excess insurance can drive up the cost of your premiums, and this can undo any savings you might have made with your voluntary excess.
And one very important thing to remember – excess insurance isn’t free! You’ll have to pay for it as well as your main car insurance. Again, this can undermine any potential savings you could have made, and potentially leave you in an even worse financial state should you ever have to make a claim.
If you really want to make savings on your car insurance, it’s best to forget excess insurance and instead go for a comprehensive policy from a provider like Go Girl car insurance that truly understands your needs as a driver. If you need help or advice about which insurance suits you, just get in touch and we can help.
The Cover You Need at a Price You Can Afford
If you’re a young driver or a first time driver, the world of insurance can be baffling – to say nothing of how expensive it can get. But go with Go Girl and you’ll be in safe hands knowing that you have great cover at an affordable price.