Insurance Excess and Claiming Excess

Despite having an insurance policy, many do not understand what insurance excess is. Some are confused about who pays what and why, as well as how to source the funds to pay for an accident that was not their fault. Below is some clarity and advice on the matter:

What is insurance excess?

That an amount payable by a policyholder in the event of loss, similar to a levy. It is a sum of money that a client must pay in the case of a car insurance claim settlement. When it comes to paying this amount, it does not matter who caused the accident and this aids in avoiding customers submitting minor and fraudulent claims, helping to keep premiums down.

Excess Insurance

When comparing car insurance options, choose a plan that requires a higher excess payment so that premium costs stay low. Voluntary excess is the amount payable towards a claim on top of compulsory excess. The consumer selects the amount of voluntary excess when they take out their policy, and a higher voluntary amount usually means a lower premium.

Who pays this amount if there was an accident?

The policyholder is always liable to pay the excess as insurance companies do not place blame as criteria to determine who or who doesn’t pay it. One can claim the  amount from the guilty party, but this can be a time-consuming endeavour. There are circumstances when you cannot recover the excess amount, such as:

  • Not having the guilty party’s details
  • The guilty party does not have any income or assets to attach
  • The legal costs outweigh the recovery costs
  • You can’t race the guilty party
  • The merits of the claim do not justify the recovery of the excess

Although not the guilty party, policy owners may be at the risk of increased premiums after claims because it does not matter who is to blame. Insurers only restore the no claims bonus if there is a full recovery. It’s not a “no blame” bonus but a no claim bonus

Most insurance companies have legal representatives that aid in assisting their clients to help recover their excess free of charge when they are not the guilty party in the wake of an accident.

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All info was correct at time of publishing October 31, 2018