Why you pay an excess – insurance demystified
An excess is a contribution you’re required to pay towards a claim you make on your car insurance policy. This makes it important to select a level of excess you can afford. As you don’t want to be left out of pocket when something does go wrong when you do make a claim, you’ll have to pay more towards it.
And it’s advised to choose an excess that reduces your car insurance premium. Insurance companies can reduce your premium when you increase your excess because this shifts some risk from the insurer back to you. Essentially when your excess is increased it saves insurers from having to pay out numerous small claims.
An insurer may have many types of excesses that can apply in different situations. However not every policy has the same types of excess and they don’t all apply in the same situations either. The type of excess you’re liable for are listed on your certificate of insurance.
Also in instances when no one is at fault the excess will still need to be paid. For instance if your car was damaged during a flood, or while it was parked then you’ll still be required to pay a basic excess. But if you don’t want to pay excess you can add extra coverage to your policy so that you won’t have to pay any type of excess for certain claims.
As there are instances where most insurers waive the excess as well as if you were not at fault and you can provide the name and address of the person who was. You won’t pay excess because your insurer will be able to claim their costs back from the person who was at fault.