All about Excess
‘Excess’ is a term you may hear quite a bit in reference to car insurance. If there were a claim on the policy, you would pay this amount. Younger drivers generally find that the excess is obligatory. You may however, pay a higher premium to lower the excess, or avoid it altogether. On the other hand, paying a higher excess could actually lower the premium amount. This would mean that you are willing to cover more of the financial load should you file a claim in the future. Insurance companies tend to reward you with lower premiums year after year if you do this.
Excesses have evolved to fit better with different forms of car insurance. The most familiar types are Standard driver excess, and an excess based upon age. One other commonly used excess refers to a driver not nominated on your policy being involved in an accident.
Excess Types
Standard Driver Excess – When you file a claim, you will pay this standard amount. Factors that determine the amount include, who was operating the vehicle, and what state you live in. Some insurers will not charge the excess if you were not at fault in the claim. However, you may have to pay up front, and be reimbursed once the claim procedure and repairs to your car have been completed. $200 to $700 is the general range of an excess. Higher excesses are often found in Eastern Seaboard states with larger populations. Tasmania, Western Australia, and South Australia have less expensive excesses.
Age Excess – Insurance companies that insure younger, less practiced drivers will charge this type of excess. If a drive is under the age of 24, the excesses will differ widely. The same is true for a 25-year-old driver who has driven for less than two years. These drivers will likely pay around $200 to $400. Excess charges of $750 to $1650 are normal for drivers under the age of 21. If you are a driver 21 to 25 years of age, you are a bit better off. Your excess may be around $300 to $700.
Non-nominated driver – A driver involved in an accident that is not mentioned in your policy will cause you to incur this type of excess. This amount might be $500 to $1500. Double check the fine print in your policy, as not all insurers charge this excess.
Factors such as the type and age of the car, as well as the age of the driver are used to determine the amount of mandatory excess. If you choose to pay a higher amount of excess thatn the company states is obligatory, your premiums may be lowered. The company lowers the amount of premium when you pay a higher voluntary excess because the financial risk to the company is lessened in the case of an accident.
If you are a younger, less experienced driver or your car is more expensive to fix mandatory excesses charged by the insurance company might be higher, and you may not be able to qualify for a discount. You can get a better discount by consenting to the corrected amount of excess.
Filed Under: Insurance Comparison
