What to do if you can’t afford to pay your excess?

Money to pay for car insurance excess

April 6, 2020

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Car insurance and motor insurance premiums continue to fluctuate and, more often than not, rise between insurance providers - motorists are always looking for ways to keep the costs of their premiums down.

Reducing car insurance costs with excess

Many drivers choose the option of paying voluntary excess (on top of compulsory excess), where you agree to contribute money towards the cost of a claim in the event of an accident.

Drivers can choose how much they want their voluntary excess amount to be and generally, the higher the excess, the lower the annual insurance cost is.

This may seem like a justifiable option for agreeing to pay an excess, with savings of up to 20% on annual payments, but many people find that they cannot afford to pay the excess when the time comes to paying out in the event of an insurance policy claim.

In this guide, Bobatoo looks at the risks and the options available to you if you cannot afford to pay your car insurance excess.

I've had a non-fault accident and cannot afford to pay my excess

If you've been involved in a road traffic accident that wasn't your fault, you don't need to pay the excess. The party who is at-fault, however, will need to make a claim on their own insurance policy to cover the cost of any damage.
If, however, you were either the at-fault party or you were partly to blame for the incident, you will need to pay both voluntary and compulsory excess when making a claim for compensation on your car insurance policy.

Is my excess too high?

With many drivers opting to pay an excess in order to reduce their car insurance premiums, insurance companies assume that they will have the money ready to pay it when the time comes.

Research shows that a third of motorists who choose to increase their excess don’t actually have the savings ready to pay for it in an unexpected event. So if you don’t already have the savings in place, increasing the amount of excess can be a huge financial risk, so be wary of this.

While it can be risky for those with little savings behind them, it is still a good way of reducing your car insurance premium, as prices are continually rising.

What steps can I take if I can't afford my excess?

Preparation is the most sensible option and, in an ideal world, having a savings account with the money ready to cover your excess is the best step.

Some car insurance providers also offer Excess Insurance which insures the agreed excess.

>>> Get a FREE quote for Excess Insurance now <<<

Excess insurance: what is it?

Excess insurance will reimburse you for the excess paid on an insurance claim up to a pre-determined amount (usually anywhere between £250 and £1,000, depending on your policy and excess amount).

It is an optional extra to your car insurance policy and it can cost anywhere between £30 and £70 per year, meaning that any savings made by having a higher voluntary excess would be reduced.

For more information on excess insurance, what it is and how it can help you to save money on your car insurance premium, take a look at Bobatoo’s guide on Excess Insurance here.

Want a great deal on excess insurance? Get a FREE quote now.

Are there any other ways to cut the costs of car insurance premiums?

When it comes to reducing the cost of your car insurance premium, you could choose to set your excess at a more affordable level and have a look at other options:

  • Paying for your policy annually, rather than in monthly instalments, will save you money in the long-run as you will avoid interest charges.
  • Opt for a credit card that offers 0% interest on purchases for the first 12-15 months to help you pay your policy in full.
  • Reduce the risks to your vehicle by installing security equipment that is approved by your insurer and always keep it locked in a safe place.
  • Drive sensibly and your premiums will be significantly lowered. Research shows that if you drive carefully with no claims for 5 years, you can lower your insurance by as much as 75%.
  • Have a black box installed in your vehicle to monitor your driving – safe drivers receive cheaper insurance premiums. This optional extra is known as black box insurance or telematics insurance – find out more in Bobatoo’s guide here.
  • Shop around and make sure you look at a range of deals with car insurance providers on comparison sites before settling on one policy. Staying loyal to the same insurance provider could actually be costing you more! So it’s always important to shop around before your renewal date.

For more information on how to save money on your premiums, take a look at Bobatoo’s 10 tips and tricks for cutting costs on car insurance here.

Where to find a cheap car insurance deal

Car insurance is a necessity and it can be an expensive one at that, but if you shop around online and are aware of the various ways you can lower the costs of your premiums, you could save a lot more money.

Bobatoo can help you by comparing the various policies available with the top car insurance providers in the UK to find a policy that suits your exact needs and budget. Simply tap the green button below to get a free, no obligation quote today!


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