Excess fees have risen at a higher rate than inflation for 7 years.
When renewing your car insurance policy, you’ve probably realised that increasing your voluntary excess results in a cheaper annual deal – a clever loophole, right?
Unfortunately, this is not the case – and research from GoCompare suggests that almost 70% of motorists have been forced to wipe their savings accounts, take out additional finance or are simply unable to pay the excess fee required to make a claim on their car insurance policy.
The statistics also show that the average excess for vehicle theft has risen by a quarter, which is likely down to the increase in the number of vehicles being stolen in the UK due to the tactics deployed by criminals stealing keyless cars.
One shocking figure showed that the amount that car insurance providers charge in excess has risen to £3,000 in 2019 – more than £2,500 higher than the 2012 average.
What happens if I can’t pay my excess?
If you cannot afford to pay the excess fee attached to your car insurance policy, your insurance provider may refuse to pay out – until you can stump up the cash, at least.
If your insurer refuses to pay your claim, it will be down to you to cover the expensive costs, which you took out insurance for in the first place. Your insurer may be understanding of your difficulty and offer you an alternative, such as paying your claim minus the excess you owe.
The best way to avoid such a scenario is to be prepared, which means either:
- Ensuring that you have enough money to cover your excess in advance
- Taking out Excess Insurance
For more advice on what to do if you cannot afford to pay your excess, head over to Bobatoo’s guide here.
Avoid paying excess with excess insurance
One way to ensure that you are never caught short by an unexpected accident is by taking out an Excess Insurance policy.
Excess Insurance is designed to cover either a portion, or the whole of both your voluntary and compulsory excess fees in the event of a claim. It is purchased separately from your car insurance and can be paid for in a one-off payment or on a monthly basis.
Find out more about excess insurance here: Excess Insurance Explained
Comparison website GoCompare raised further concerns about the increase in excess charges, claiming that more and more motorists are failing to understand the potential consequences of increasing their voluntary excess and they are instead being seduced by the lower annual insurance premiums.
In a survey consisting of 2,000 drivers, a staggering 13% said that the excess fee attached to their insurance policy was more than they realised, while (perhaps even more worryingly) 6% said that they were not aware that they needed to pay an excess fee at all.
Car insurance – the hidden costs
As well as having to pay an excess charge in order to qualify for a claim, there are a number of other fees that you may be required to cover in order to avoid invalidating your policy. These can include:
- Set-up fees
- Cancellation fees
- Policy alteration fees
- Fees for duplicate documents