Excess Insurance Explained: Could It Save Money On Your Car?

By: James Ruppert
Could UK car excess insurance cover save you money?

Car insurance premiums are at an all time high, leading drivers to look for new ways to save money on their coverage.

Insurance comparison sites can save drivers money, as will buying a lower risk car, but how about increasing the excess on your insurance?

While many don't consider it, increasing your excess can significantly reduce insurance premiums at renewal time.

 

What is an insurance excess?

Insurance excess is the fixed amount of money you pay to the insurer in the event of a claim. If your excess is £250 and you subsequently have a claim for £1000, the insurance company will deduct £250 from this leaving you with £750.

 

How can a higher excess reduce car insurance costs?

Opting for a higher voluntary excess can reduce the cost of your insurance premium, the reason for this is the insurer's risk is reduced because they won’t need to pay as much in the event of a claim.

All well and good, but most drivers would rather not pay more in the event of an accident.

So what is excess insurance and how can it help?

 

What is excess insurance?

Increasing your voluntary excess up to £1000 might sound scary, in the event of a claim you could be looking at losing a lot of any money - here's where excess insurance comes in.

In the event you need to make a claim on your insurance, your excess insurance (which usually has no excess itself) will cover any costs of your car insurance excess. A confusing sentence indeed, but it's worth understanding. 

Let's explain it with an example.

 

Excess insurance example

InsureMyExcess have proven that using excess insurance policies, rather than just reducing your car insurance excess, can often work out cheaper compared to normal renewal prices.

Let's use the example of a 17-year-old driver with fully comprehensive car insurance on a Fiat Punto. 

With a £250 excess they were quoted £2,005.85. By increasing their voluntary excess to £1,000, the insurance premium falls to £1,742.92, a 13% saving (£262.93).

Excess insurance coverage for this can be found for less than £50.

What does this mean?

The example above saves around £200 on their annual car insurance with a higher insurance excess 

PLUS they have no excess to pay in the event of an accident - thanks to their excess insurance protection.

 

Excess Insurance - Car Hire

Excess insurance can also cover car rental excesses, bringing down the costs of car rental - in the UK and even abroad in Europe or the rest of the world.

  

Please note, we always recommend you make sure to read the small print on any insurance policy you buy.

 

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