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What is Motor Excess Insurance?

Wednesday 30th January 2013 18:02:48

There are only a few types of insurance that are compulsory in the UK. The most common of which is motor insurance, and it is a legal requirement to have at least 3rd party cover in order to drive on the roads. Other styles of motor insurance would be 3rd Party, Fire and Theft and the most popular style, Fully Comprehensive. Over the last few years the subject of Motor Insurance premium prices have been often in the news. The price of the average annual policy has soared, and this is accentuated in certain groups such as young drivers. There are a number of ways that drivers can seek to reduce their premiums, and one such way is to increase the motor excess payable on the policy.

What is the 'excess' on a Motor Insurance policy?

Very simply the excess on your motor insurance policy is an amount deducted by the motor insurer in the event of the coat of any claim. So lets say you have a bump in your car and the cost of the repair is £500. If you have an excess on your policy of £250 then you will have to pay this amount, and the insurer will pay the other £250, making up the £500 cost. If the vehicle is stolen, then your motor insurer will provide you with the market value of the vehicle.


Lets say that is £5000, and you have an excess on the policy of £500. This means that the insurer would deduct this excess and pay a settlement of £4500 using the figures above. So this is how the excess works on your motor insurance, and most motor insurance policies will feature an excess contribution of some kind. However, in order to lower your motor insurance premium, you could opt to take a higher excess on your policy. For example of the standard excess was £250 on the policy, by opting to increase this to £500 then you could reduce the cost of your annual premium. This is all well and good, but if you have to make a claim on the cover then you have a higher excess to pay.  How can a motor excess insurance policy help protect your finances?


What is motor excess insurance?

This type of insurance can cover the cost of paying your excess, if you have a claim on your motor insurance. For example, an annual motor excess insurance policy for £250 may cost around £35. If you buy this policy and make a claim on your motor insurance, instead of having to pay the excess on your policy, you can claim the cost of this on your motor excess insurance cover. This can help in making motor insurance much more affordable, and policies can be bought to cover excess payments of £750 or more.


Another handy feature that you can claim on the policies more than one, if you opt for enough cover. For example, buy a policy with a £500 claim on it, and you can cover for two £250 excess claims in the same year. So if you were wondering what motor excess insurance was all about, we hope we have answered the question for you!

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