If you are not entirely sure just how car excess insurance works, you may find the following frequently asked questions and answers to be enlightening.
What is car excess cover and why do I need it?
If you look closely at your motor insurance policy, you will probably find that it contains reference to something called “the excess”.
The excess is just a descriptive word for an amount of money that your insurance policy provider will expect you to pay towards the cost of any future claims.
Depending upon your insurance provider, the sums involved can be significant. You may find, for example, that your excess runs into four figures. That is the amount that will be deducted from any future settlement value of your claim.
Car excess insurance is a different form of cover that will reimburse you for any excess amounts that are deducted by your main policy provider prior to the settlement of a claim against your motor policy.
Is it only my motor policy that contains excess?
No, this is a very common feature of many different types of insurance and you may find that it is equally commonplace across different types of motor policy.
The excess will typically be a minimum mandatory amount although some policies may allow you to increase the voluntary amount of excess you will pay in the event of a claim, in return for a lower premium.
Would my excess policy also settle my main claim?
No, it is an entirely separate form of cover.
It exists to protect you from needing to pay the excess from your own financial resources.
Can I take excess cover out once I’ve had an accident and know just how much I will have to pay in excess on my main policy?
Like most forms of insurance, excess cover exists to protect you against the financial implications of something that might happen in the future rather than something which has already taken place.
So, no, you could not take out an excess policy to cover the excess deduction that you will be facing on an existing claim which is being processed by your main policy provider.
Do I need this type of policy for each of my main insurance policies?
Some providers of excess insurance, such as Bettersafe will be able to offer you a policy that might be able to cover the excess on several of your main or lifestyle type policies.
Is it only excess that this type of policy covers?
It is a little difficult to say for certain because the only way to know exactly what cover a policy provides is to read it.
However, it may be the case that your excess policy will provide certain elements of cover that are typically missing from a standard car insurance policy.
This may be particularly true in situations relating to car hire where the in-the-price car insurance may exclude a number of components* that might prove to be expensive if you damage them while the car is under rental to you.
Some excess policies may cover those components thereby providing you with the added protection.
Can’t I simply pay extra on my main policy to have the excess removed ?
On some policies, the provider may have an absolutely mandatory minimum excess which they will not waive or reduce under any circumstances.
Some companies may allow you to pay extra for the removal of the excess but it might still be sensible to compare the cost of doing so against the cost of simply protecting yourself against that expense through a separate and independent excess cover policy.