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Car Insurance, Save On Premiums!
By: Michael Challiner
Everyone has to agree to an excess of some kind when getting a car insurance
policy – it's the way the system works. Basically it means that if you have an
accident and your car needs to be repaired, you will have to pay a set amount
towards the bill. If the accident is your fault, you lose the money. If the
accident is not your fault, the third party insurer reimburses you for the
excess payment. If your car is written off, then your insurance company will
deduct your excess from the settlement payment.
Things aren't always that simple however, unfortunately there are a number of
drivers on British roads that don't have any insurance, so the question is, what
happens with your claim if you have an accident with an uninsured driver?
The 1988 Road Traffic Act, section 143 clearly states that all drivers on the UK
roads must have insurance for the vehicle that they are driving. The point of
the insurance is that if you have an accident and it is your fault, you have the
means to cover the cost of the damage incurred by way of your insurance policy.
It's a sad fact that a significant minority of drivers choose not to bother with
insurance, disregarding UK law and saving themselves hundreds of pounds a year
as a consequence. Someone has to pay for these drivers though, and it's the
people that do have insurance that foot the bill!
The Department of Transport estimates that as many as 5% of drivers are not
insured on the vehicle which they are driving. Statistics also show that
uninsured drivers are more likely to be involved in an accident. It's a growing
trend and is proving very difficult to eradicate.
If you have an accident, you are not at fault, and the third party is not
insured, then you will be reimbursed by the Motor Insurers' Bureau. Who funds
them? The car insurance industry! That's where some of your inflated premiums
end up. You will also find that you'll have to pay the agreed excess yourself,
there will be no-one able to refund that for you.
Here's the low-down on the basics about ‘excess':
Compulsory Excess – this is the amount that the insurance company regards as the
minimum amount that you must pay towards the cost of damages . This is agreed at
the outset and depends on a few details you're your age and your driving record.
For example, if you are older and have a clean driving record, you could only
have to pay a minimum of £50. Those with a more chequered driving history, or
those that have not been driving for very long, could feasibly have to agree to
pay £500. The average for most drivers is £100 .
Voluntary Excess – this is the amount over and above the minimum ‘compulsory'
amount set by the insurer that you are prepared to pay. This is an opportunity
to lower your premiums, because if you can agree to a high excess, then the
insurance company knows it won't have to pay out as much if you need to make a
claim. It's one of the few sure fire ways of saving a few pounds on a car
insurance policy, but you may not be offered the choice, it depends on
individual insurers.
The garage won't give my repaired car back until I give them a cheque for the
excess – is this what usually happens?
This is completely normal, and you will have to pay and then get the money back
from the third party insurer. Always give the car a good once over to ensure
that the repairs have been satisfactorily completed. You also need to keep the
receipt to get the excess back from the insurer, and just in case they dispute
the charges, get a copy of the repair schedule so the insurer can see exactly
what work was completed on your vehicle.
About the Author:
Michael writes for Brokers Online who specilise in Life Insurance, Car Insurance
Quotes and also offer most other UK financial services including Fixed Rate
Mortgages
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