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A Guide to Car Insurance Excess

All car insurance policies come with an excess, but what exactly is it and when is it payable?

by Louise Thomas

What is a car insurance excess?

An excess is the contribution you pay towards a claim you make on your insurance policy, or is held back by your insurer.  The excess will vary depending on multiple factors including; your car, the age and experience of the drivers, and the type of policy you have.

How does it work?

Let’s say your policy excess is £500 and unfortunately you are involved in an accident; if you make a claim costing £1,000, you will pay the first £500 and your insurer will pay the remaining £500.

If the cost of repairs is less than your excess, you won’t be able to make a claim. For example, if you have a cracked wing mirror, replacement glass can cost less than £20. You won’t be able to claim off your insurance policy but at least it’s affordable!

Why do insurers charge an excess?

An excess deters drivers from making multiple claims for minimal damage e.g. a cracked wing mirror or a small dent. The excess encourages drivers to take responsibility for minor damage. Insurance is there for the big claims that you wouldn’t be able to pay for yourself.

Do I still pay the excess even if the accident wasn’t my fault?

Yes. You pay the excess if you make any claim made on your insurance policy regardless of who’s to blame. However, if it’s proved the accident was the other person’s fault, your insurer will try to recover the full cost from the at-fault party’s insurance. In that case, the excess you have paid is refunded so you’re not left out of pocket!

What is the difference between a voluntary and compulsory excess?

Nearly all annual car insurance policies have a compulsory and voluntary excess.

A compulsory excess is a fixed amount set by your insurer. This is based on the different ‘risk factors’ on your policy, such as age and experience. For example, the compulsory excess is nearly always higher for a new or young driver, compared with an older more experienced driver. Some drivers will have no compulsory excess at all.

The voluntary excess makes up the rest of the total excess you will need to pay in the event of a claim. As the name suggests, this is a voluntary contribution and you can choose how much you wish to pay on top of your compulsory excess.

Should I make my excess lower or higher?

The voluntary excess you choose can affect your premium. Generally, if you choose to increase your excess, you will have a lower premium. In the same way, if you choose a lower excess your premium is usually higher.

Although a lower premium is attractive, you must bear in mind that if you do need to make a claim, you could end up paying more overall. If you can’t afford the excess, your insurer could refuse your claim, or deduct the amount from what they pay towards the repairs.

How does the excess work on Car Sharing Insurance?

The excess on Temporary Car Insurance works slightly differently to traditional annual policies. Firstly, there is no voluntary excess, only compulsory.

The excess on most Veygo Car Sharing Insurance policies is set at £750. However, some customers are now able to choose at excess as low as £250, depending on the policy details.

As you are borrowing someone else’s car for a short period of time, if you claim need to make a claim, we need to make sure that you are only held responsible for damage that occurred while you were driving, or in control of the vehicle. After all, you don’t want to be held responsible for pre-existing damage to the owner’s car!

That’s why we ask you to take photographs of the car you borrow at the start of your temporary policy. If you don’t take photos and then need to make a claim, you may have to pay an additional excess of £250.

Excesses are just one of the many confusing topics of car insurance! If you’re unsure about any other insurance terminology, check out our Car Insurance Jargon Buster and get to grips with the lingo.

Louise Thomas

Hi I'm Louise and I'm a Marketing Executive at Veygo. I've been driving for nearly two years after several "practice" tests! I love the freedom that comes with finally having a driving licence. Road trips with my friends are the best - especially when we've got an awesome playlist going! (check out our Spotify for road trip playlists!)

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