Tips on excess payments
When it comes to vehicle insurance there is a concept called excess payment. This is nothing but the fixed amount, which the insured pays to the insurer each time a car is repaired through insurance. Usually the payment, instead of reaching the hands of the insured, it reaches the accident garage directly when you collect the car. In case your car is declared to be a written off, the insurer will deduct the excess payment as per the terms and conditions of agreement between the insured and the insurer from the settlement it makes to you.
If the other driver was at fault in the accident, and the third party’s insurer accepts that, you’ll be able to get your excess payment back from the insurance company of the other person. What if the other driver doesn’t have insurance? Every driver knows that it is required legally (under Section 143 of the 1988 Road Traffic Act) to have insurance for any damage done to any others. Many drive without insurance regardless of that fact. Estimates of uninsured driving incidents in the UK are hard to get. Those who are breaking keep quiet about it anyway.
According to calculations from the Department of Transport, 5% of vehicles are on the road without valid insurance. Not only does this group of people add costs on honest drivers as far as premiums go, but they are a risk to other drivers when they’re on our roads. As a result, driving without insurance is being considered more and more a major problem in society.
But driving without car insurance is not a victimless crime. If you have an accident with an uninsured driver and the accident was not your fault, the repair costs will be subsidized by the Motor Insurers’ Bureau, which is financed entirely by the industry, or by your insurer. As a result, if you are involved in an accident caused by an uninsured driver you will ultimately get you car fixed but you will still have to pay the surplus and there will be no one to recover your excess from.
The lowest excess payment your insurance company will accept on your policy is compulsory excess. Minimum excesses depend on your personal details, driving record and insurance company. The average excess is around $100 today, but younger drivers can face up to $500 in excesses. Older, experienced drivers can get by with an excess of $50 if their driving record is good.
To receive a lower premium, you may offer a higher excess payment than what is demanded by the insurance company. Your voluntary excess is the amount above the compulsory excess you agreed on in case you have to make a claim on the policy. Larger excess lowers the risk in the finances carried by the company to enable your insurer to offer a lower rate.
If automobile repairs are necessary, be sure you thoroughly examine the work when you pick it up. If you are satisfied with the work, obtain a complete receipt and, if possible, a work schedule detailing all work done. This documentation will be necessary if you are filing a claim against the insurance of a third party.
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