Insurance excess- how much is too much?
Discussion
My insurance excess is nuts, over £600. Since I am a young driver I get silly prices if I set a low voluntary excess , and increasing that to a slightly higher one makes the prices much more sensible. As in for the sake of my excess being £300 more I save over a grand in premiums. Then the young driver compulsory excess gets slapped on and I would be as well scrapping the car if I crashed it.
You obviously weigh-up the saving against the extra risk/likely claims you'll make.
Some people say "I'd not claim less than £1000 anyway so why not run a big excess" and the answer to that is "because you have to be able to find that money in the event of an accident!"
It's worth remembering that it's not just "money you don't get from a claim" - it's "money you have to PAY in the event of a third-party claim against you". Even in the event of a not-at-fault claim you may have to pay your excess personally and reclaim it from the third-party yourself - so it's money you need to be able to find.
Other than that - no obvious downsides really!
Some people say "I'd not claim less than £1000 anyway so why not run a big excess" and the answer to that is "because you have to be able to find that money in the event of an accident!"
It's worth remembering that it's not just "money you don't get from a claim" - it's "money you have to PAY in the event of a third-party claim against you". Even in the event of a not-at-fault claim you may have to pay your excess personally and reclaim it from the third-party yourself - so it's money you need to be able to find.
Other than that - no obvious downsides really!
My general rule of thumb is that the quote has to fall at least half as fast as the excess rises - ie to increase the excess by £200 the quote needs to fall by £100. In reality I've had 0 fault claims and 1 theft of wheels in 25 years. My wife has had 2 fault claims in 4 years, so her driving backs up my system way better than my own driving does.
slipstream 1985 said:
£1000 on the basis that if it went wrong the car would be a total loss anyway and its value is slowly rising just now so i would'nt be out of pocket.
You would if you were responsible for an accident where your car was relatively undamaged but a third party's car (or themselves) were - you'd have to find £1000 or face legal action and everything that entails!Even if you wrote your car off, you'd still have to find money to cover the excess - it's a mistake to think of it as "money I won't get" - it's "money you may have to PAY".
SD1992 said:
My insurance excess is nuts, over £600. Since I am a young driver I get silly prices if I set a low voluntary excess , and increasing that to a slightly higher one makes the prices much more sensible. As in for the sake of my excess being £300 more I save over a grand in premiums. Then the young driver compulsory excess gets slapped on and I would be as well scrapping the car if I crashed it.
Another driver who's only thinking of their own claim - once again, your excess applies to third-party claims too - in the event of an accident, you're going to be writing cheques...johnpeat said:
Another driver who's only thinking of their own claim - once again, your excess applies to third-party claims too - in the event of an accident, you're going to be writing cheques...
No it doesn't, not in most cases - if only the third party vehicle is damaged then you don't need to pay an excess in most cases. If the third party is at fault you will have to pay if you claim on your policy, but, if you know the third party is at fault you can claim through their insurer and therefore not pay an excess (this also often works out simpler) - the only thing your insurer will be involved in will be that they have to be informed of the accident
It is "illegal" under EU law to require an insured to pay third party losses.
The rare cases where you have All Risks XS are these High Excess (several thousand £) insurers offering low premium, your excess is contractual with the Insurer, not with the Third Party. I have my doubts about how hard they could chase you for the debt, given the amount of consumer protection about.
The rare cases where you have All Risks XS are these High Excess (several thousand £) insurers offering low premium, your excess is contractual with the Insurer, not with the Third Party. I have my doubts about how hard they could chase you for the debt, given the amount of consumer protection about.
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