How a Waiver of Excess Works

On insurance policies in the UK you are likely to see a waiver of excess. This is a part of the insurance policy that is similar to a deductable in the United States. It’s the amount of money that you have to pay before the insurance company covers the damages to your vehicle. If you travel to the UK and have to rent a car then you’ll be likely to see a waiver of excess.

When the amount of the waiver of excess is exceeded in damages then you pay the amount of the waiver of excess and the insurance company covers what’s left over. So if you have a waiver of excess of $1,000 and an accident causes $5,000 in damages to your vehicle then you will have to pay the $1,000 up front and the insurance company will cover the other $4,000. While a waiver of excess is not included in the premium of the insurance policy you pay it is still very helpful.

In the example above you’d be better off paying the $2,000 rather than having the insurance company pay the difference and then raise the premium of your car insurance because you made a claim. If you’re a young driver you should be cautious before reporting an insurance claim as most insurance companies will increase the premium by a good amount.

The amount of your waiver of excess will depend on the type of coverage that you have and what amount you choose. The deductibles can range from as little as $250 to $1500. It’s important to remember that the higher that you have the deductible the lower your monthly insurance payments will be. The problem with having a higher deductible comes if and when you need to make a claim as you would need to come up with that amount before your insurance policy will cover the difference.

If you have an insurance policy and find the waiver of excess to be a percent rather than a figure you should consider asking if they can get a regular figure for it. This is because the percent can hurt you if you are involved in an expensive accident and have to pay thousands of dollars rather than a set price.

When you pay the waiver of excess it usually is to cover damage that was done to your car whether it’s due to an accident, theft, or weather damage. Most of the time third party liability coverage does not have a deductable. If you choose to you can get additional coverage to give you a piece of mind.

Car insurance isn’t the only use for a waiver of excess. You’ll also see it applied to other types of insurance such as health, travel, and home insurance. Finally you should remember that if you do have damage to a rental car that you may be charged the damage and the insurance company would have to reimburse you.

Graham McKenzie is the content syndication coordinator for Carinsurancesa.co.za. South Arica?s leading Car Insurance portal.