Car insurance excess question.

Yorksfitter96

I bumped into a parked car this morning on my way to work, I left a note and the owner called me and we exchanged details and I've notified my insurance. I'm a bit confused about the excess. My car didn't suffer any damage really, however the other car had some damage. Will I have to pay the excess once the owner claims on my insurance? It's not something I've been through before and I have read online you only pay your excess if claiming for damages on your own car. I'm just not sure what to expect. Thanks in advance.

TadleyBaggie

No, excess is only payable when your insurance company repairs your own car.

Yorksfitter96

That clears things up. Thanks a bunch

forgotmyname

Depends on the insurer there are policies where the excess applies to ALL claims. Several threads on here where
people bought that type of policy with a high excess thinking they will never claim for their own vehicle only to
find that the excess applied to any claim made.

Aretnap

Depends on the insurer there are policies where the excess applies to ALL claims.

While these policies exist, they are very rare, to the point where I'm not sure whether anyone currently sells them.

They are quite unattractive to most insurers as the terms of the Road Traffic Act require the insurer to pay third party claims in full. So they have to pay the full cost of the third party's repairs, then ask the customer to pay back their excess. If the customer doesn't pay then that gets them into a world of bad debt and collection agencies which simply isn't worth it for the sake of a £200 excess. Much easier just to set the third party excess at zero and calculate the premium accordingly.

(By contrast it's easy to enforce the excess on an own damage claim - you just don't fix the customer's car until he pays.)

There used to be a company called XSDirect who did sell a product with a £3000 all sections excess. The target market was young drivers in expensive cars who vastly underestimated the risk that they would have an accident and have to pay £3000, wanted to keep their insurance costs down, but were just about rich enough to have £3000 squeezed out of them. I haven't seen them crop up for a while though so I think they might have stopped operating. Either way, so long as the OP has a policy with a standard sized excess from an insurer that he had heard of before he bought the policy, there is about a 99.9% chance that the excess applies to claims for his own damage only.

Yorksfitter96

Checked my policy documents, and even ran them through chat GPT which seems to also agree the excess would only be paid on damages to my own vehicle.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/81923359#Comment_81923359

Can you point to any?

I know one of the Admiral group used to do it many years ago but quickly stopped.

The excess works on the first party claim as they can require it to be paid up front so no pay = no claim, or it becomes the garages problem who won't release the car without the payment or its deducted from any total loss settlement. IE it always gets paid.

The RTA requires the insurer to pay a third party claim in full. They can't refused to deal with the TP awaiting the cheque from their insured. As such it's much more problematic getting it paid and at the token levels excesses are debt recovery often isnt cost effective.

If you look at corporate insurance for firms with vast fleets of vehicles you are then in a very different place and there its common for them to have an aggregate deductible as its not a question of if they are going to have thousands of claims a year but of how many millions their claims will be this year. Given an insurer has operational costs, profit margin and has to charge IPT you want an aggregated deductible at least at your average claims level otherwise you are just giving money away (unless you have a captive reinsurer or other mechanisms to reduce the premiums)

Goudy

All Section Excess policies were more prevalent a few years ago and some people got caught out by them in a big way. They obviously undercut normal policy premiums and small print wasn't always read or understood.

You paid an excess (usually massive) on all parts of the policy, so with an accident involving another vehicle you were liable for both excess payments.

I think there are only a couple offering this type of car insurance now, it generally needs to be "found" by drivers in certain very high risk categories rather than pushed on drivers via websites and comparison sites like they used to be.

More general with normal car insurance is you pay the excess if you claim to repair your car. It will generally be broken into two, compulsory and voluntary.

Compulsory is just that but the voluntary can usually be adjusted when you buy your policy and that normally effects the price of the premium. Increasing the voluntary will normally reduce the premium slightly.

MyRealNameToo

Compulsory is just that but the voluntary can usually be adjusted when you buy your policy and that normally effects the price of the premium. Increasing the voluntary will normally reduce the premium slightly.

It's possible to have more than one compulsory excess, some charge everyone one, some charge an extra excess for young or inexperienced drivers, some charge an extra excess for using a non-network garage. Make sure you know all the bits that add up to the compulsory

Voluntary excesses are modelled like any other attribute. Logic says a higher excess should give cheaper premiums but it's not always the case. Most notable is if you ask for a very high excess which the mainstream insurers dont offer so only get prices for those aimed at high risk drivers who naturally charge more.

GrumpyDil

Which interestingly matches my daughter's experience yesterday where increasing her excess put the premium up.

Yorksfitter96

No mention of All section excess in my details. So it's looking like just my insurance will go up next year