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Car Insurance, Essential Information About Excess Payments
By: Michael Challiner
An excess payment is the fixed contribution you must pay each time your car is
repaired through your car insurance policy. Normally the payment is made
directly to the accident repair garage when you collect the car. If your car is
declared to be a write off, your insurance company will deduct the excess agreed
on the policy from the settlement payment it makes to you.
If the accident was the other drivers fault, and this is accepted by the third
party's insurer, you'll be able to reclaim your excess payment from the other
person's insurance company. But what if the other driver is uninsured?
All motorists know that it's a legal requirement (under Section 143 of the 1988
Road Traffic Act) to have insurance for any damage they cause to third parties.
But still many drive without insurance. An estimate of the incidence of
uninsured driving in the UK is hard to come by and, for the obvious reasons,
those drivers involved in breaking the law have every reason to keep quiet about
it.
Calculations from the Department of Transport suggest that in the UK around 5%
of vehicles are being driven without valid insurance. This group of people not
only impose costs on honest motorists in the form of higher premiums, but their
presence on our roads also represents a serious risk to other road users.
Consequently, uninsured driving is increasingly being regarded as a major social
problem.
But driving without insurance is not a victimless crime. If you have an accident
with an uninsured driver and the accident wasn't your fault, the repair costs
will be paid for by the Motor Insurers' Bureau that's funded in its entirety by
the industry, or by your insurer. Therefore, if you're involved in an accident
caused by an uninsured driver you'll eventually get you car repaired but you'll
still have to pay the excess and there'll be no one to reclaim your excess from.
What is a Compulsory Excess?
A compulsory excess is the minimum excess payment your insurer will accept on
your insurance policy. Minimum excesses do vary according to your personal
details and driving record and by insurance company. Today the average excess is
around £100, but younger drivers could be faced with excesses of up to £500 -
whilst more mature, experienced drivers with a good driving record, could be
offered an excess of just £50.
So what is a Voluntary Excess?
In order to reduce your insurance premium, you may offer to pay a higher excess
than the compulsory excess demanded by your insurance company. Your voluntary
excess is the extra amount over and above the compulsory excess that you agree
to pay in the event of a claim on the policy. As a bigger excess reduces the
financial risk carried by your insurer, your insurer I able to offer you a
significantly lower premium.
The garage has repaired my car but it won't release the car too me until I pay
the policy excess to them. Is this right?
Yes, that is normal practice. But make sure you inspect the car when you collect
it. Satisfy yourself that the repair is perfect. Then make sure you keep their
receipt for your excess payment as you will need this if you're reclaiming
against a third party's insurance. And just in case there's a dispute, it's a
good idea to make sure the repair garage gives you a repair schedule. This will
list all the repairs that were made to you car.
About the Author:
Michael Challiner writes for Brokers Online, who specilise in Life Insurance and
Mortgages but also offer most other UK financial services including Car Insurance. Source: www.isnare.com. |
