Excess Protection Insurance

Zebra

There seems to be a few companies offering insurance policies to protect your car insurance excesses.

Does anybody have any experience of them, and more importantly claiming on them?

InsideInsurance

The important thing to remember is you only have cover if you actually pay the excess, ie if repairs fall below the excess value you cannot claim! It is one consideration as the marketing ploy is to up your excess and then buy this as a cheaper option but you then effectively exclude more minor damages.

I did find a policy that was badly worded (it has since been changed) that allowed you to buy it after an incident and still claim on the policy (it required the policy to be in force at the date of claim not the date of incident). They paid out the excess with no questions within a week or two of submitting the claim.

Zebra

Thanks II.

So if I have insurance with an excess of £300 and an excess protection policy, if repairs cost £350 I can claim my £300 excess, but if the repairs cost £250, I can't claim anything?

InsideInsurance

Correct, as you wont have paid your excess.in the second example you cannot claim your excess. That said, with an excess of £300 you are almost always going to exceed that for anything more than a broken window. When you start looking at a £1,000 excess you then start getting into more ropey territory.

Sledgehead

InsideInsurance wrote: »

Correct, as you wont have paid your excess.in the second example you cannot claim your excess..

This sounds crazy at first : surely by definition, any amount of money you end up paying out ahead of the insurer is an excess?

Having said this, I can see how this situ might come about from the legal definition of excess in this country. Compare with the US form of excess, the 'deductible':


A deductible is also known as excess in some countries, especially the United Kingdom. However, an excess and deductible are slightly different, even though they are generally used as synonyms.
An excess is an amount a policyholder must bear before the liability passes to the insurer (subject to the sum insured). Whereas a deductible is an amount deducted from the claim amount. (wiki)

So presumably if the excess is not breached, no liability passes to the insurer and hence no claim is fileable (despite the fact he'd want to know about the incident to up my policy in future) , thus no excess is reclaimable.

Is this how it works? :think:

And here's another thought: do purchasers really understand this product? Is this not just another PPI waiting to happen? Does anyone care? Or is it all GDP when the poilicies are bought and all GDP when they are refunded, so why shoudl a government care?

adamc260

InsideInsurance wrote: »

The important thing to remember is you only have cover if you actually pay the excess, ie if repairs fall below the excess value you cannot claim! It is one consideration as the marketing ploy is to up your excess and then buy this as a cheaper option but you then effectively exclude more minor damages.

I did find a policy that was badly worded (it has since been changed) that allowed you to buy it after an incident and still claim on the policy (it required the policy to be in force at the date of claim not the date of incident). They paid out the excess with no questions within a week or two of submitting the claim.

A company allowed you to purchase an insurance policy 'after the event' had happened? Surely that goes against the purpose of Insurance? What a daft company.

forgotmyname

Would just getting a quote with a lower excess be money better spent?

No point in having a £1000 excess and paying £100 to insure that if you only pay £99 extra for zero excess.

Does the excess insurance have its own excess? Cn you cover that with another policy?

InsideInsurance

adamc260 wrote: »

A company allowed you to purchase an insurance policy 'after the event' had happened? Surely that goes against the purpose of Insurance? What a daft company.

Thats why the underwriter changed the wording, it used to say you had to have the insurance in place prior to making a claim against the other policy. So if you had the accident, held off claiming, bought the excess insurance and then claimed you were covered. Now there is an additional clause excluding any incidents that occur before the cover too.

Thankfully it was not changed until after the CUO, an FD and I had bought it post incident

Would just getting a quote with a lower excess be money better spent?

No point in having a £1000 excess and paying £100 to insure that if you only pay £99 extra for zero excess.

Does the excess insurance have its own excess? Cn you cover that with another policy?

In your example yes it makes sense to simply pay for the lower excess that way but where excess insurance can be useful is where you have a compulsory excess (eg young driver, convertible car etc) and so have no other option for getting rid of it.

The excess insurance policies I looked at had no excess of their own. They worked in one of two ways, either a 1-1 mapping to another policy (normally motor) with a max number of claims and max excess per claim. The other was a blanket cover for most personal lines policies and would pay a maximum of £X per year. £X was typically notably lower than the motors # * £Y

Sledgehead

InsideInsurance,

you might be interested to know that I have asked my current provider about the excess protection they sell and THREE tele-staff told be unequivocally that I would be able to make claims on my excess protection even when my intial claim was less than my total excess, in direct contradiction of what you have said.

They even said I would be able to make multiple claims, which is interesting also, since the 'sum insured' is equal to my total excess. Simple maths tells me that if your interpretation is correct, only one claim would be possible in these circumstances and that would be equal to my total excess.

I'd love to hear your response.

InsideInsurance

All the ones I dealt with required the excess to have been paid to be able to claim it back but insurers and intermediaries write new policies all the time and so it could be that someone has come up with one that does cover below excess claims too since I last looked (about 12 months ago).

Doing so would make a better proposition to the customer and it could therefore be sensible to take a "sum insured" approach. Most of the ones I looked at were flat rated or almost flat rated and the only way to achieve it is by the higher coverages excluding the smaller claims by stating the excess must be paid. What you are talking about is effectively an excess and small claim policy.

It ultimately all comes down to the wording of the policy. Do you have a link to the wording as it would be the quickest way to check?

Sledgehead

Inside Insurance,

thanks for the reply.

Dunno about a link* but I can quote the relevant words from my last two policy letters for excess insurance, both from the same insurer (Rias). I can do this in one, despitethe provider of the excess cover changing during this period. I should also point out that the sum insured was £300 for both policies and this was equal to the total of copulsory + voluntary excess. Also they claimed that multiple claims could be made. Here's the wording:

"The Excess Protection Policy provides insurance to cover reimbursement, up to the Sum Insured, for Your Excess under your Motor Car Insurance Policy following the successful settlement of a claim ..."

Now, according to wikipedia, an excess differs from its american cousin, the deductible, in that deductibles are deducted from the payout post successful claim, whilst failure to exceed the excess relieves the insurer from all liability. In other words, you can't make a claim on a policy with an excess UNLESS you have exceeded the excess. If you can't make a claim, you can't make a successful claim, so you can't, according the the wording above, reclaim any costs that fell within the excess.

The above suggest to me:

- my insurer IS writing the same clauses in its current excess protection (see *);
- my insurer is telling me I can make a claim when I probably can't;
- my insurer is even telling me I can make multiple excess claims when simple maths tells me all I can make is one claim equal to my excess.

Is that your interpretation?

Dunno about anyone else, but much of the attraction of excess protection is the ability to cover those bumps and grazes that you'd otherwise have to pay for out of your own pocket (cos they are less than the excess). That's certainly why I bought it last year. Turns out I probably could not have made a claim. This sounds like another massive misselling scandal brewing.

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* - found the same quote on their website : http://www.rias.co.uk/Car_Insurance/
Just follow the link on the right to "Excess Protection"