What Is Car Insurance Excess

The car insurance excess is the agreed upon amount your insurance company requires you to pay for any repairs that are being made to your vehicle due to a claim being filed.

The amount of excess is determined by you and your insurance company provider at the time you start your policy. In most cases when you have your vehicle repaired the excess amount will be paid by you directly to the garage or mechanic making the repairs.

Anytime you file a claim that involves repairing damage to your vehicle another motorists caused you can have the excess amount reimbursed to you or the insurance company will just deduct it from the amount of your settlement.

There are millions of motorists on the road that do not have insurance coverage or the policy they carry is not sufficient to meet the demands of the claim you file. It is illegal to operating a moving vehicle without insurance but it is not a crime to be underinsured as long as it meets the state requirements. If you are involved in an accident with a motorist who is either underinsured and uninsured your insurer may cover the costs if you have chosen that protection but you will still be required to pay the excess amount for any repairs.

There are over 5% of drivers on the streets in the UK who are uninsured. The insurance companies provide protection but due to the fact they are at risk for paying for other drivers mishaps the insurance premiums continue to rise.

The minimum excess that your insurance provider will accept for your policy is the compulsory excess. This amount will change from one driver to the next. The insurer will use your vehicle type, age, experience driving, as well as your driving record to determine your compulsory excess payment. The amount will vary from $50 to $500 or $1000 depending on your criteria and the insurers guidelines.

You can choose to pay a voluntary excess to help lower your premium payments. If you have a very low excess quoted to you it can be increased and this will lower your policy price. You have to be careful when increasing your excess amount as you should be able to afford the amount if the need arises. You do want to lower your premium though so increasing it to what you can afford comfortably should give a good balance.

You need to realize that if you have your car in the garage getting repaired due to an insurance claim the garage will not be able to release the vehicle to you until they receive full payment for repairs. The insurance company will pay the sum they are supposed to but the final payment will normally be the excess amount of the policy. This is why it is extremely important to be able to afford the excess amount you agreed on so that you will be able to easily come up with it when needed.

Susan Reynolds is the content coordinator for a leading South African Insurance Provider who specialises in Car Insurance Options.