Excess insurance for personal vehicle.

thedreadedlurgy

Hi everyone, I have used excess insurance to cover the excess on a hire car before and saved money but i have noticed you can also do this for your own car insurance (e.g. goodbye excess .com)

I was considering at renewal increasing my voluntary excess to lower my premium and cover it with excess insurance so i am not exposed and save money.

Has anyone tried this??????

forgotmyname

Bumping my excess up from zero to £350, Reduces the premium by about £20. So not worth the trouble of excess insurance.

Pushing my excess over £350 actually starts pushing the premium back up.

Is it worth it?

lazer

As far as I know the excess insurance covers all your insurances, so if you have travel insurance, house insurance, car insurance, mobile phone insurance etc, all those £20 saved on various insurances could be worth it!

InsideInsurance

lazer wrote: »

As far as I know the excess insurance covers all your insurances, so if you have travel insurance, house insurance, car insurance, mobile phone insurance etc, all those £20 saved on various insurances could be worth it!

There are different types of excess insurance out there. There are ones that are tied to a specific policy and these tend to have the higher limits per claim, often unlimited claims and cheapest premiums.

There are also other types that cover "all" your insurances but these tend to have both a per claim limit and a per year/ aggregate limit and are more expensive.

With both types of insurance you have to be careful of what happens if the claim value is below your excess. Certainly the original policies didnt used to pay out despite having encouraged you to take a £2,000 excess etc. So if you'd dont this and your claim was for £1,900 you'd get nothing. Some of the more recent policies I;ve looked at do cover claims for below the excess but do require you to have informed your insurers.

As has been said above, due to negative selection and other factors there tends to be a sweet spot for excess' that is well below the maximum excess that some insurers offer.

You also need to pay the excess and claim it back so dont get stuck with an excess that is too big for you to be able to pay and wait a month or two to get it back

thedreadedlurgy

Thank you, it does seem like a bad idea now. Especially after you have pointed out that if you raise your excess and then have a claim that comes in under that amount you will be left footing the whole bill entirely by yourself.
I think they could make that a bit clearer up front, I can see that coming as a nasty surprise to people driving around under the impression they are covered for that.
Maybe if you were purchasing 3rd party only it could be quite useful.
Thanks again for the knowledgeable advice.

forgotmyname

If your 3rd party only you wont have any excess to pay. So no use at all for that.

InsideInsurance

thedreadedlurgy wrote: »

Thank you, it does seem like a bad idea now. Especially after you have pointed out that if you raise your excess and then have a claim that comes in under that amount you will be left footing the whole bill entirely by yourself.
I think they could make that a bit clearer up front, I can see that coming as a nasty surprise to people driving around under the impression they are covered for that.
Maybe if you were purchasing 3rd party only it could be quite useful.
Thanks again for the knowledgeable advice.

It was a caution, it is how some of these used to operate but some do cover below excess claims. Just something to check before buying.

These ancillary products are very often created by MGAs or tiny insurers rather than the mainstream insurers. Arguably they are more entrepreneurial than the likes of Direct Line or Aviva but that does also mean there can be more of both loopholes and silly terms/ bad practices.

Whilst working for one company that was a reseller of this type of insurance, amoungst other things, I spotted their terms were daft as the requirement was the insurance was in place prior to the claim being made rather than the incident/ event having happened. So when I had a car crash that was my fault, I bought the excess policy and next day called my car insurers to make the claim thus meaning my excess was covered. I did point it out to the RM who managed the relationship with the underwriter and he just smirked and said he'd already told them but only after doing the exact same with a claim on his PMI :rotfl:

Unfortunately that wording was subsequently corrected but not until after I got my £750 back

As above, TPO have no excess and so would have no use of such an ancillary product.