What is car insurance excess?
If you get into a car crash and need to make a claim with your insurance company, “excess” is the amount of money you agree to pay to start a claim. There are two kinds of excess – the voluntary kind, and the non-voluntary kind.
Non-voluntary excess, usually called “compulsory excess”, is set by the insurance company. They usually use details about your car to set the amount. The details used would be your car’s make and model, its age, and condition. Details about you, like your age and where you live, are also used to figure out the non-voluntary excess amount.
Voluntary excess is something you can choose to pay if you want to. You can set the amount to whatever you want to or choose not to pay anything extra. If you choose to pay more, it can bring down your monthly payment. But you should make sure it is something you can pay if an accident does happen! Your voluntary excess will be added on top of your non-voluntary excess.
Do I have to pay my excess if someone hits me?
To start the claim process after an accident, you usually have to pay the excess. Then the insurance company will start their investigation to find out who is at fault for the accident. If the accident is not your fault, the excess will be refunded to you. Some companies will deduct your excess from your car’s total repair bill, so you pay the excess at the end of the claims process, but that depends on your insurance company.
When do I have to pay my excess?
If you are making a claim on someone else’s insurance, you do not have to pay an excess. The same is true if someone makes a claim on your insurance, you do not have to pay an excess. You only have to pay an excess when damage is done to your own car, and when the accident is your fault. If the cost of repairs is less than your excess, you cannot make a claim on your car insurance, and you would just pay for the repairs.
What if you can’t afford the excess cost?
If you cannot afford your excess cost, your insurance company might offer you a payment plan. But this is not a guarantee. An insurance company might choose to not let you file your claim until the excess is paid in full first. It’s best to avoid this situation by having enough money set aside in a savings account to pay your excess. You can also help avoid this situation by not setting your voluntary excess too high.
Why is there an excess?
Insurance companies use excess to try and prevent fraud and reduce the number of low value claims. Excess helps prevent fraud because if someone is trying to scam the insurance company, the idea of paying money up-front and hoping the insurance company does not catch the scam is not an attractive idea to scammers. Excess helps reduce the number of low value claims because it would be a waste of time to send money to the insurance company to fix it when the person can just get it fixed themselves.
The next steps
If you’ve been in an accident and need an attorney, choose the experienced attorneys at Van Law Firm to guide you through your case. Our experienced attorneys can help you understand your coverages and how they apply to your collision so that you can get the most compensation for the collision and get back to your life. Call our office today for a free case evaluation and consultation.