There are two reasons you might consider taking out excess protection car insurance. The first is to protect yourself from any unaffordable bills if you do need to claim your car insurance. The second is to save yourself money on your car insurance premium. Want to know how it works? Find out more with our quick guide.

Firstly, what is an excess?

The excess is the amount you have to pay if you claim your insurance. In most cases, you don’t make a payment to your insurance company. Instead, the excess amount is deducted from the final settlement that the insurance company agrees to pay.

For example, your car insurance has an excess of £400. You have an accident, and the repair bill comes to £900. Your car insurance provider will pay out £500, which is the £900 bill less the £400 excess.

Many insurance policies include an excess, including home insurance and car insurance.

Why is my car insurance excess so high?

Insurance providers set an excess to try to put customers off claiming on the insurance policy for smaller amounts. They do it because sorting out small claims can cost them a lot of money in administrative time and effort.

The amount of excess set by your insurance company is compulsory with no option to reduce it. This excess varies depending on your insurance company and circumstances. It’s typically somewhere between £50-£300.

When you get a quote for car insurance, this will typically also include a voluntary excess in addition to the compulsory excess. This is an extra excess you can pay, and you can control the level. Generally, the higher the voluntary excess, the lower your premium will be. Voluntary excess can normally be anywhere between £0-£750.

Remember, you’ll need to add together the compulsory and voluntary excess figures to see how much you will have to pay yourself if you make a claim. For example, a compulsory excess of £150 and a voluntary excess of £250 means you’ll have to pay out the first £400 for any claim you make.

Beware of high voluntary excesses on cheap car insurance from comparison sites

Insurance companies try to get your attention on price comparison websites by offering the lowest premiums they can. This is often achieved by setting the voluntary excess high. Watch that you don’t get caught out by carefully checking both the compulsory and voluntary excess before you buy. Even if you specify a lower voluntary excess, you may still be offered premiums with much higher excess amounts.

What is the maximum car insurance excess?

The maximum voluntary excess you can set varies between providers but usually is somewhere between £250-£750.

Next, how does excess protection car insurance work?

If you hold an excess protection car insurance policy, this will cover the costs of your excess on your regular car insurance.

For example:

You have an excess of £500 on your car insurance policy. You have an accident, and the repair bill comes to £1,500. Your car insurance policy will pay out £1,000 with the first £500 being your responsibility. But your excess protection policy will reimburse you that £500. That means you have peace of mind that there won’t be any unexpected big bills to cover.

Do I need excess protection car insurance?

Insurance is all about protecting you from financial risk. To find out whether you need excess protection car insurance, ask yourself:

• Can I afford to pay the excess on my car insurance if I need to make a claim? If you can’t easily get hold of the money, you could be left in a tricky situation unable to pay the repair bill and without your car.
• Am I happy to take the risk of needing to pay out my excess? Excess protection will reassure you that there will be no unexpected big bill.

What about if an uninsured driver hits me?

Normally, if you have an accident and you’re not at fault, the other party’s car insurance takes care of the excess. But what if an uninsured driver hits you? In this case, you have to claim for the repair on your insurance and may have to pay the excess. Check your car insurance policy as some insurance companies automatically offer to protect your excess. If not, excess protection car insurance could be a valuable extra layer of financial protection.

How can excess protection car insurance save me money?

Savvy shoppers are increasingly turning to excess protection car insurance and discovering that two layers of car insurance can be cheaper than one. Yes, you read it right. Taking out two separate layers for your car insurance could save you money. That’s because increasing your excess is a handy trick that can help to bring down your car insurance premium. But rather than leaving yourself exposed to hefty excesses if you do need to make a claim, you can also take out excess protection car insurance.

You could save ££s as long as the amount you pay for your excess protection insurance is lower than the amount you save off your regular car insurance by increasing the voluntary excess.

Are there any downsides?

Bear in mind that you’ll need to make two separate insurance claims if something does happen. You’ll make one claim on your regular car insurance, where you’ll have to pay the excess. Then you’ll need to complete an additional claim on your excess protection policy to have the cost of the excess reimbursed.

Finally, find out more

If you’re interested in excess protection car insurance, get in touch with our friendly team at Easy2Insure. Whether you want to get smart with cheaper car insurance or want to protect yourself from unexpected bills, we can help. We’ll shop around on your behalf to source the best value excess protection. And that can give you peace of mind or even save you money on your car insurance annual premium. Call us on 0800 917 9522 or get a free quote.