Car Insurance Excess Explained


Finding the cheapest car insurance is harder than you may think… and it’s partly thanks to the jargon which may as well be written in Greek. At The Insurance Blogger our aim is to answer your questions in plain English, and amongst those we are asked most commonly are the following:

What’s excessive for excess?

The ‘excess’ is the amount of money a policyholder has to pay in the event of a claim. For example, if accident repairs cost £850 and a policy has an £200 excess, the policyholder pays £200 and the insurer pays the remaining £650.

Most insurers will allow you to choose the level of excess, and as a rule of thumb you can expect insurance premiums to fall as the excess rises.

If I have two accidents in a year, do I have to pay my excess twice?

No. You only pay one excess in the year (but next year’s premium will shoot through the roof!)

Is the full value of my car covered in case of an accident?

No. The price paid for a car is not the insurance value; it’s the book value or market value. The book value is generally the trade price a garage would pay if you part-exchange or sell your car to them. Market value is the price you would expect to pay a trader for a similar vehicle to yours – for example, a model of the same age with the same mileage, colour, and extras.

If you have a choice, opt for market value rather than book value, as you will receive more for your car.

Will my car insurance go up if I have an accident with a protected no-claims discount on my policy?

Probably. You will not lose your no claims discount but will more than likely pay more when you renew your policy as the result of a ‘fault accident’. Remember, fault accidents include hit-and-runs even if the car was safely parked and you were away from the vehicle.

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One Response to Car Insurance Excess Explained

  1. mick says:

    on my daughters policy it says £2oo excess then in the schedule it says £400 she had a bump and the insurace company want £400 excess how does she stand

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