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When choosing the best car insurance for your budget, the car excess will likely one of the deciding factors. If this term is foreign to you right now, keep reading. This could save you plenty of money in the long run.
Having car insurance with voluntary excess amounts is a very good reason for young drivers to smile.
Image: Adobe Image Stock / ashtproductions

How Does Car Insurance Excess Work?

Car insurance excess is the amount of money you agree to contribute towards the cost of a claim with your insurance covering the remaining amount. Car excess goes toward the uninsured portion of your loss. If it weren’t for the excess, you would be paying this portion when you make a claim. When you lodge a claim after an accident, your insurance provider will guide you on how to pay your excess. This would happen in one of three ways:
  • Your insurance provider will deduct the excess from any amount paid out to you;
  • You pay your excess to your insurer;
  • You pay your excess directly to the garage making the repairs to your car upon collection.

Compulsory Vs Voluntary Excess

As the name implies, compulsory excess is applied to your policy by the insurance provider. This type of car excess differs according to the car owner’s age and the type of vehicle. Insurance providers often set higher compulsory excess amounts for young and inexperienced drivers, since they categorise these as high-risk individuals, more likely to get into accidents. Similarly, owners of high-performance or luxury cars can expect to feel the sting of a high compulsory car excess. This should come as no surprise, given how expensive replacement parts can be. Voluntary excess, on the other hand, allows you to set your own excess amount (above the compulsory excess). However, this is a rather effective way to lower your overall car insurance costs. In a nutshell, you can attract lower premiums from your insurance provider by increasing your voluntary excess.

What Is Excess Waiver Insurance?

Depending on your car insurance provider, you may find some insurance policies offer to reduce your basic excess over time (provided you don’t claim in that time) or offer a fixed excess amount. For everything else, there’s excess insurance, also known as excess waiver insurance. This is optional insurance product typically applies more to hired cars, protecting you against any excess charges should your hire car be stolen or damaged. However, excess waiver insurance can also be a great help to the aforementioned younger, high-risk drivers, who would be charged high excesses. Whether you’re a new driver or more experienced on the roads, you can’t go wrong with comprehensive car insurance from a reliable insurance provider. And now that you know all there is to know about car insurance excess, you know how to get more value for your money.

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