Car Insurance policy with a higher excess could lower your motor insurance premium
The price of annual motor insurance premiums has been one of the most topical subjects in the motor industry in the last few years. Motor Insurers have blamed the increase of personal injury claims as the main reason why we have seen the cost of motor insurance climb so dramatically.
Motor Insurance premiums on the rise
Of course the main aim of any vehicle owner is to adequately cover themselves at the lowest possible cost, and the advent of insurance price comparison websites have been a welcome advance with this task. Being able to compare many insurers at a time can certainly help with the search for cheaper car insurance. This is often coupled with the fact that many of these comparison sites can attract a higher discount level from an insurer than if you went directly.
Save on motor insurance by increasing your excess....and then protect your excess[/caption] Even so consumers are always looking for further methods by which you could look to reduce the cost of your insurance still further. One way you can reduce the cost is by increasing the voluntary excess you opt for on the policy. The excess is something that you have to pay first, before any claim is paid for on any repairs, or in fact deducted from any market value settlement from your insurer, of the deem the vehicle a total loss. So if you have a bump, and the repair bill is £1000, and you have a £250 excess, then the motor insurer will pay £750 and you will pay £250. If the vehicle is deemed a 'total loss' after an accident, it had a market value of £15,000 and you had an excess of £250, then the motor insurer will pay you £14,750. The idea behind an excess is that it reduces the liability of the insurer, especially on lower value claims. These are far more numerous compared to a claim whereby the vehicle is 'written off', so this means the insurer is likely to pay out less over a year. The overall effect of this is to reduce the cost of the annual premium to you.
Motor Insurance Shortfall Excess Protection to reduce your overall insurance costs
One way you could look at reducing the motor insurance premium is to take a higher voluntary excess. If you increased your excess from say £250 to £500 or £750 then this could reduce the premium quite dramatically. However there is one problem................you will have to contribute more if you make a claim! The solution could be an annual motor insurance shortfall excess protection policy. This product could cover the coat of any excess contributions you have to make, up to a certain amount. For example, if your annual premium with a £250 excess is £600, and it reduces to £450 with a £750 excess then you could take a motor excess insurance product to cover you. A typical £750 limit may cost £50-£60, but even adding this to your motor insurance premium would save you around £100 in our example. So as you can see, opting for a car insurance policy with a high excess could save you money without any extra financial burden to you.