Why Can The Excess You Pay Affect Your Premium?

There are two types of excess with a motor insurance policy – a compulsory excess and a voluntary excess. The amount of the compulsory excess is set by the insurance company whereas the policyholder can often select to pay an additional voluntary excess from a range of amounts.

For instance, if the compulsory excess was say £200 and the motorist chose to also pay a voluntary excess of say £100 when claiming this would mean that he or she has to find £300 of the repair/replacement costs. If the compulsory excess was say £200 and the voluntary excess was say £200 when making a claim then the policyholder would have to pay £400 of the repair/replacement costs.

The amount of the excess is one of the factors that may affect how much you have to pay for your car insurance. For instance, the higher the amount of the excess may mean that the premium is lower and the lower the amount of the excess may mean that the premium is higher.

Obviously, when deciding upon the amount of the voluntary excess, the policyholder will need to be confident that he or she can afford to find the total amount of the excesses in the event of a claim from their own resources.

Insurers often charge young drivers a higher compulsory excess than a mature, experienced driver who has a good claims history. This is because, statistically, a younger, inexperienced driver is more likely to be involved in a road traffic accident than a mature, experienced driver and claim of their motor insurance policy.

When you are looking to arrange car insurance for the first time or your existing cover is shortly due to be renewed then you may want to look at quotes from a range of insurance providers and check how much their compulsory excess is for as this may vary between insurers. One way of doing this is by using a price comparison website.

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