Car Insurance Excesses Explained

It’s tempting to do everything you can to reduce the price of car insurance. For many young drivers it’s a major expense, with bills running into hundreds of pounds a month. So when you’re online and looking for quotes, and see a quick way of reducing the premium it’s easy to be tempted. But before you agree to a voluntary excess of £1000, it’s important to understand what the excess is, how it works, and the implications for you if you need to make a claim.

Compulsory Excess

This sum of money is set by the insurer. The excess is the amount you will be expected to put into the repair pot should your car get damaged. For example, if you claim for £2000 and your compulsory excess is £400, the insurer will cover £1600 and you will be expected to make up the remainder. The amount of the compulsory excess can vary hugely depending on a range of factors including your age, address and job. In general terms, younger people, or those driving expensive vehicles pay more in compulsory excess than older people with less powerful cars. All insurers will set their compulsory excess differently. Look at a range of insurance companies to find the best deal for you.

Voluntary Excess

In addition to the excess set by the insurer, you have the option to opt for a voluntary excess too. This is where you have the chance to affect the price of the premium by raising or lowering the amount of excess. If like most people you’re getting quotes online, this is often just a matter of selecting a new excess amount from a drop down menu and hitting a recalculate button. Bear in mind though that it’s not all about decreasing your premium to the bare minimum; if you agree to an excess which is more than you can afford, you may be unable to repair or replace your car if anything happens to it.

Legalities of Insurance

Buying car insurance is just one of those unavoidable car ownership expenses, along with paying the road tax and getting the annual Check MOT test booked in. Not having it isn’t an option either. Police cars are now equipped with software which reads number plates and automatically detects which cars are uninsured. If you’re caught, you can expect points on your driving licence and a hefty fine too.

Shop Around

One of the golden rules for buying insurance is never to just blindly accept the renewal when it comes through. Often you can reduce the premium considerably by shopping around and comparing quotes from a range of different insurers. If you can strike a better deal elsewhere, all it takes is a simple phone call to your previous insurer to tell them you don’t wish to renew. They may be prepared to match price offered by another insurer to keep your custom. Even if they don’t, you can just need to log back into the website offering the best price and click the button to buy. If you’re buying or selling or leasing a car in the UK, make sure you Check Mot of the vehicles first.