Is Your Excess A Little On The "Excessive" Side?

I must admit, until I began the research for this article I had no idea as to the amount of money we Britons spend on car insurance every year. In fact the figure currently stands at a cool £8.5 billion. In our endeavours to decrease the cost of our premiums we may inadvertently be adding to this figure by increasing our voluntary excess. On top of this amount we currently shell out £2.36 billion in the form of excess payments at claim time.

All car insurance policies carry an excess, this may be in the form of a general, windscreen or young persons excess. It may be a combination of all of the above or just one of them. Many insurers allow you to declare a voluntary excess which will either decrease or increase your policy depending on the amount that you choose. At times we may fall into the trap of believing it is much cheaper to increase the voluntary excess in order to reduce our premium. This is fine to save you money at the time of purchasing the policy, but in the event of a claim you will effectively loose any saving you made. Add to this the fact that the rise or fall of your voluntary excess and the effect it causes on your premium is not directly proportional and you may find yourself paying more money out than if you’d opted for a larger premium with smaller voluntary excess.

The average excess on a car insurance policy currently stands at £79 but for many of us, especially when falling into specific group or niche, this figure can be much, much higher. According to research carried out by uSwitch the typical voluntary excess can vary between £167 and £1020. If you were quoted £600 for your car insurance quote with an excess of £300 and you increased this excess to £600, you may find your premium only drops by £50 giving you a loss of £250 in the event of a claim.

As mentioned in the above paragraph, those belonging to a particular group, for example; young drivers under the age of 25; may find an extra excess added to their policy. This can prove costly in the event of a claim. However, in this case increasing the voluntary excess will have more of an effect on the premium and can reduce it by up to 40% in some circumstances. In this case it may be worth adjusting the excess at the time of quoting to see how much it reduces the policy and weighing this against the total excess costs. You may find that it works out cheaper overall. Cheap car insurance is not totally elusive; it just requires a little time, effort and investigative work.

It seems that the best advice I can give is to seek quotes from several companies and perhaps use a comparison site as this will return quotes from a vast range of companies with the excesses detailed. Once you have settled on a particular quote from a company that offers you the features you desire at a reasonable price, you should play around with the excess to see how much difference it makes. Remember, it is all to easy to say that you don’t have to worry about excesses, but you never know what’s round the corner and a high voluntary excess to gain a small decrease in premium will cost you dearly in the end.

Finding cheap car insurance is not that difficult if you’re willing to do a little groundwork. Remember when looking at a prospective car insurance quote to check the level of excesses.

The average excess of a car insurance policy falls at around £79 but can vary greatly.