Is There an Excess on Car Insurance Policies?
Caeva O'Callaghan | August 25th, 2020
Insurance excess is a common term used to describe an amount you’ll pay if you claim. But does it apply to car insurance?
Yes, there is an excess on all car insurance policies. How much you’ll pay will depend on what kind of policy you have, and which insurance provider you buy from.
An excess is the fixed amount you have to pay out if you make a claim on your insurance. Think of it as the price of making a claim.
Your insurer will deduct your excess from the full amount. Excesses vary from policy to policy, so make sure you know yours well before you need to pay it.
In this article, we’ll answer questions like:
- What is a car insurance excess?
- Why do I have to pay an excess on my car insurance?
- How do I find out my car insurance excess?
Each year, many drivers are caught out because they don’t know what the excess is, or why it has to be paid. So, before you make a claim, make yourself aware of the facts.
What is car insurance excess?
The excess is the fixed amount you need to pay towards a claim before your car insurance provider adds the rest. For example if your excess is €300 and you make a claim for €1,000, your insurance provider will pay out €700.
Increasing your excess may save you money on your premium. But you don’t want to be landed with an excess if the worst happens and you can’t afford to pay.
The amount of excess you’ll have to pay in the event of making a claim will vary between insurers. The lowest standard excess on the market is €300 with Liberty and Axa Insurance. The highest standard excess is €350 with Allianz Insurance.
Then there’s an outlier: get insurance with XS Direct, and you’ll find their standard excess is a whopping €3,000. As their target market are over 25 with a few years’ no claims bonus under their seatbelt, it makes more sense for these proven safer drivers to pay lower premiums.
Car insurance and excess
Up until recently, the excess was only applied to own damage claims. This means claims for damage rendered to your own vehicle.
But, this has now changed. Here at QuoteMe.ie, we’re noticing that some insurance companies are charging an excess on windscreen claims. For instance, some insurers charge a €30 excess on windscreen claims. This amount is payable directly to the firm who is charged with fixing your windscreen. A good way of avoiding this excess on your windscreen claim is to make sure that you only use windscreen replacement companies that are approved by your insurance company. You can find out which companies your insurance providers endorse by contacting them.
How to reduce your car insurance excess
There are two types of excess, voluntary and compulsory. Compulsory is a flat fee, which your insurance provider sets. Not every car insurance policy will have a compulsory excess, but a lot of them will.
You’ll need to agree a voluntary excess with your insurance provider. Some car insurance providers allow you to increase the excess you’ll need to pay. This usually means you pay a lower monthly or annual premium. It means that in exchange for your lower price, you’d pay more if you were to make a claim.
Increasing your excess may save you money on your premium. But you don’t want to lump yourself with a large excess if you get in an accident and can’t afford to pay.
We took the liberty of running the numbers for you. With a €250 excess, a standard annual premium was €606.54. But, when we increased the excess to €750, the premium reduced to €533. It is always worth talking to us about using this technique, so give us a call today to find out more.
If you need advice on car insurance excess, call us in Quoteme.ie today!
If you are searching for car insurance and not sure of how best to manage the excess, pick up the phone and talk to our car insurance experts. We can check the market for you and look at the impact that different excesses will have on your policy. We are available for calls Mon-Fri between 8.30am and 5.30pm on 0818 224433 or 042 9359051.
If you would like an immediate car insurance quote, our quote engine compares the Irish car insurance market. We look forward to helping you today!