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  • FIRST POST
    • MatthewAinsworth
    • By MatthewAinsworth 7th Jan 18, 7:09 AM
    • 3,011Posts
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    MatthewAinsworth
    High excesses are worth it
    • #1
    • 7th Jan 18, 7:09 AM
    High excesses are worth it 7th Jan 18 at 7:09 AM
    Hi everyone
    On my buildings insurance, increasing my excess by £350 reduced my premium by £10, this is a 2.8% return (with risk) on only one use of the cash.
    If you overlap this with other insurances, using the same pot to partly self insure, it all adds up you'll have quite a significant return

    This is like a hidden return on cash, an inflation busting one. Still though get interest on that account!
Page 1
    • huckster
    • By huckster 7th Jan 18, 7:34 AM
    • 3,018 Posts
    • 1,265 Thanks
    huckster
    • #2
    • 7th Jan 18, 7:34 AM
    • #2
    • 7th Jan 18, 7:34 AM
    Matthew

    Suggest you explain the downsides to this money saving tip!

    E.g if you had say an accidental damage event to say a carpet costing £750 to replace and you had spent the £350 cash saved up for the excess, you would have to save up, before getting the carpet replaced. The excess might delay people getting issues sorted.

    Having a higher excess is only really suitable for people who will mostly have savings or income they can access immediately.
    • MatthewAinsworth
    • By MatthewAinsworth 7th Jan 18, 7:42 AM
    • 3,011 Posts
    • 1,193 Thanks
    MatthewAinsworth
    • #3
    • 7th Jan 18, 7:42 AM
    • #3
    • 7th Jan 18, 7:42 AM
    If you have the cash, do it before considering investing, this is lower risk than investing for similar rewards, but not risk free. If you can't afford the risk, then you need a lower excess
    • paddyandstumpy
    • By paddyandstumpy 7th Jan 18, 8:42 AM
    • 945 Posts
    • 426 Thanks
    paddyandstumpy
    • #4
    • 7th Jan 18, 8:42 AM
    • #4
    • 7th Jan 18, 8:42 AM
    Is it really worth it for a tenner?

    You’ll need 35 years claim free to have ‘saved’ enough to claim once!
    • Reardoa
    • By Reardoa 7th Jan 18, 8:47 AM
    • 28 Posts
    • 8 Thanks
    Reardoa
    • #5
    • 7th Jan 18, 8:47 AM
    • #5
    • 7th Jan 18, 8:47 AM
    Increased excesses are never worth it. Only if you plan on claiming for disaster claims. Even then its debatable. Insurers like it because your unlikely to make silly small claims but the discount you get never reflects that. Only one winner.
    • MatthewAinsworth
    • By MatthewAinsworth 7th Jan 18, 9:16 AM
    • 3,011 Posts
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    MatthewAinsworth
    • #6
    • 7th Jan 18, 9:16 AM
    • #6
    • 7th Jan 18, 9:16 AM
    Paddy - odds are that you'd claim less often than that, self insurance is a game of probability...

    Reardoa - there is the effect of it deterring claims, but also that you are taking out a lower level of insurance. I'm judging "worth it" on what % the savings are of the excess, and considering this a return, and I believe you could use the same pot to self insure multiple things - if insurance is profitable for them then we must be statistically better off self insuring on average
    • Trentenders
    • By Trentenders 7th Jan 18, 9:16 AM
    • 1,128 Posts
    • 697 Thanks
    Trentenders
    • #7
    • 7th Jan 18, 9:16 AM
    • #7
    • 7th Jan 18, 9:16 AM
    Increased excesses are never worth it. Only if you plan on claiming for disaster claims. Even then its debatable. Insurers like it because your unlikely to make silly small claims but the discount you get never reflects that. Only one winner.
    Originally posted by Reardoa
    Feel like I'm trolling you....

    Ignore this. Increased excesses are worth it, if the reduction in premium is acceptable to you - which is quite often the case when larger premiums are involved &/or for persons with prior claims. As a tip, the largest proportion of saving can often be found at the first £50-£100 voluntary excesses.

    Having a high deductible on a comprehensive motor insurance can also be a cheaper alternative to TPFT coverage.

    You have nothing to lose be checking excess options when seeking out quotes. A £10 saving for an additional £350 excess seems bonkers though.
    • MatthewAinsworth
    • By MatthewAinsworth 7th Jan 18, 9:29 AM
    • 3,011 Posts
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    MatthewAinsworth
    • #8
    • 7th Jan 18, 9:29 AM
    • #8
    • 7th Jan 18, 9:29 AM
    The risk/reward balance will vary by insurance type too
    • Blibble
    • By Blibble 7th Jan 18, 10:29 AM
    • 306 Posts
    • 300 Thanks
    Blibble
    • #9
    • 7th Jan 18, 10:29 AM
    • #9
    • 7th Jan 18, 10:29 AM
    It all depends on your propensity to claim. It may work for some, it may not work for others

    The best advice is to do your calculations and work out whether you're ahead in the long run, by factoring in how much your saving in premiums p/a over your various insurances & how often you claim & the increased excess value associated with this.
    OnePoll: £109.45 - Populus: £145 - LuckyPhone: £42.40 - FBL: £27.80 - Crowdology: £4.88 - Prolific Academic: £11.03 - Research Opinions: £3.04 - Quidco: £0
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    • Novice investor101
    • By Novice investor101 7th Jan 18, 2:50 PM
    • 79 Posts
    • 30 Thanks
    Novice investor101
    I've actually found with my car insurance it works the other way. Setting the excess at £500 was only about £3 cheaper than setting it at £250, both fully comp. So I spent the £3. Possibly cos I've got 8 years no claims, the difference was minor. But it would be foolish to save £3 & risk paying out an extra £250 if I ever have to claim.
    • Quentin
    • By Quentin 7th Jan 18, 3:38 PM
    • 34,107 Posts
    • 18,058 Thanks
    Quentin
    Highest possible excess is good for motor insurance for those who would have bought TPFT previously (ie before comprehensive became cheaper)


    If you have a low value vehicle that wouldn't be worth claiming for in the event of an incident with no liable third party, then taking the maximum possible excess is a moneysaver - some insurers offer £1000 & more (though check lower excesses - some insurers have a "sweet spot" for excess where they start to make premiums more expensive after a certain level)
    • Reardoa
    • By Reardoa 8th Jan 18, 7:05 AM
    • 28 Posts
    • 8 Thanks
    Reardoa
    Can't be bothered arguing with you again. Suffice to say my 20 yrs experience and 6 as an underwriter tells me different.
    Again it's my opinion!
    • Rolandtheroadie
    • By Rolandtheroadie 8th Jan 18, 8:28 AM
    • 4,815 Posts
    • 4,227 Thanks
    Rolandtheroadie
    With my last car policy, it was cheapest if I had no additional excess.

    Buildings insurance, I've never checked. But with 3 claims in 17 years, that £170 saved (assuming the saving was the same every year) would have cost me quite a bit.
    • Quentin
    • By Quentin 8th Jan 18, 9:50 AM
    • 34,107 Posts
    • 18,058 Thanks
    Quentin
    Can't be bothered arguing with you again. Suffice to say my 20 yrs experience and 6 as an underwriter tells me different.
    Again it's my opinion!
    Originally posted by Reardoa
    Where is there any "arguing" going on???
    • MatthewAinsworth
    • By MatthewAinsworth 9th Jan 18, 1:03 PM
    • 3,011 Posts
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    MatthewAinsworth
    In the case of my car insurance though, in my case it stayed the same price above £100 voluntary excess, all the way to £1000, but it got more expensive beneath that
    Paying on a cashback card, will clear in full
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