All insurance policies have a level of “excess”. This will either be compulsory, which is a level set by the insurance company for drivers falling in certain groups, or voluntary. Voluntary is a level of excess the policy holder can decide upon, this can be from £0 up to several thousands. When making a claim on your insurance policy you will have to pay the level of excess which was previously agreed. The insurance company with either pay your full bill, deducting the amount of excess from the final amount or will expect you to pay the excess before they make any payout. If you are looking for a low cost policy then a high excess will be common.
Although a high excess will reduce your insurance premium costs, no excess insurance is useful in a variety of situations. These policies are ideal for those who would not be able to afford to pay any excess if they made a claim on their car insurance. Very low or no excess insurance policies are also ideal if you have a car which is valued lower than the compulsory and voluntary excesses found in many insurance policies. There is obviously no point having an insurance policy with an excess higher than the value of your car.
It is also worth considering that a no excess insurance policy would significantly increase the cost of your yearly or monthly insurance payments, and once again it is essential you take the time to calculate which option would make you financially better off.
No excess car insurance isn’t always available for all types of drivers. Those drivers which attract a compulsory excess on their insurance policy, rather than a voluntary excess will be unable to escape from the initial voluntary excess. These drivers tend to be those with a provisional driving licence, drivers who have recently received various types of penalty points, drivers under the age of 25 and drivers who although have a full UK driving licence have only done so for less than one year.
No excess insurance is prevalent when it comes to car hire insurance. When hiring a car you will be offered car insurance included in your package, this often has a high excess and if any damage is done to the vehicle during your hire period then the car hire company will charge you for this and you will be expected to then claim off the insurance policy for any amount above the excess. This is, as you can imagine, time consuming and risky especially if you do not have enough available cash on your credit card to be able to pay the excess.
No excess insurance policies often cover damage that most insurance policies do not, these include damage to windows and tyres, these often fall under the excess of many normal policies. But these are of course different with every insurance policy and you should read the terms and conditions and policy information when getting a car insurance quote!