Excess Insurance for your Car
November 7, 2016
What is excess insurance? Could it become useful? Find out now.
No one likes to pay out large amounts to buy car insurance every year. It feels like a waste of money.
But what happens if you have an accident? Or someone steals your car? A very real possibility in South Africa.
Suddenly Insurance becomes important.
Consider Excess Insurance for your Car
Two problems beset car insurance claiming. Firstly, what if the future cover increases? And secondly, you pay for policy excess which is an expensive undertaking.
Excess can be costly, but help is at hand. Excess insurance is protection that covers excess costs when filing claims. As with all forms of insurance, shop widely for the best deal.
Excess. What is it?
A payment required by your insurer for filing a claim. Often split in two – Compulsory and Voluntary excess.
Compulsory excess is non-negotiable and depends on certain factors, such as the nature of the claim, category of vehicle, and age of the driver. Voluntary excess refers to an amount that you choose.
Picking a higher amount of voluntary excess lessens your vehicle insurance premiums by reducing the insurers’ payout on a claim payout. On the other hand, you pay a higher amount when claiming.
Is there A cover for Excess?
Your regular car insurance and excess insurance work hand in hand. Excess insurance covers excess costs if you lodge a claim up to a pre arranged limit.
You choose the policy’s upper limit payout, usually anywhere from GBP 250 to GBP 750.
If for instance, you have a voluntary plus compulsory excess of GBP 300, excess insurance can be purchased for this amount.
Should the need arise for you to file a claim on your vehicle insurance, standard excess rates will apply. You will then claim the same from your excess vehicle insurer.
Although inconvenient, due to having to lodge two claims, the reward comes in the savings made.
Should I purchase excess insurance?
Choosing to pay more excess on your vehicle insurance is often an easy way of reducing your premiums.
For those worried about higher costs due to excess payments towards a claim, the excess cover can be a money saver.
Remember, that the first excess has to be paid for, which you then reclaim from your excess cover provider.
You pay for both your regular car insurance as well as your excess insurance, which adds to the overall insurance expense.
This, in turn, takes away from any savings accrued from choosing to pay a higher amount of voluntary excess.
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All info was correct at time of publishing