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Car Insurance Cover explained - What is an Excess on my policy
?
Excess:
In the event of a claim the Excess is - The
specified sum which the insured must bear before the Car Insurance
Company pay their liability.
In the event of liability exceeding the limit of indemnity
specified the Car Insurance company pay the limit specified
providing the insured has borne the limit of his policy excess.
Unlike a deductible, the excess sits below any sum insured,
e.g. an excess of £1 million and a sum insured of £10
million means that the insurer is liable for £10 million
once the insured has paid the first £1 million of any
loss otherwise covered by the policy.
Often excesses are for quite small sums, e.g. £50 accidental
damage excess under car insurance.
Excesses may be voluntary to secure premium reduction or compulsory
as an underwriting measure or simply to eliminate small claims.
If you are a good driver who doesn't claim
for fault accidents, then a high voluntary excess may well significantly
reduce your car insurance premiums.
In effect the voluntary excess alllows the proposer to take
on some of the car insurance risk themselves.
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