The average compulsory car insurance excess has risen by 47 percent in the last 12 months. That’s according to new research by a price comparison website.
It found that the average policy excess for theft claims has increased from £182 in 2020 to £267 this year.
There are smaller increases for non-theft claims, too. The average compulsory excess payable for accidental damage has risen from £185 to £234, while fire claims have gone up from £179 in 2020 to £226 in 2021.
The excess is the amount you’ll pay if you make a claim on your car insurance. There are two types: voluntary and compulsory. If the voluntary excess is £200 and the compulsory excess is £250, you’ll pay £450 towards the claim. An insurance company will only settle a claim once the excess has been paid, regardless of who is at fault.
A voluntary excess is the amount you’re prepared to pay in the event of a claim. Paying a higher amount could reduce the cost of your car insurance, but this isn’t always the case.
Compulsory excesses, set by the insurer, depend on the type of claim, the policyholder’s age and driving experience, and the type of car. Young and inexperienced drivers often pay an additional compulsory excess on top of the policy’s standard excess.
‘Excesses can be a hidden cost’
Leo Griffin, CEO and founder of GoCompare, said: “When it comes to arranging their car insurance this year, many drivers will understandably be really focused on headline price. But it is important take a minute and check exactly what cover you’ve got and consider the total cost of the policy. Excesses can be a hidden cost. They can seem complicated and most people tend not to think about what will happen when they make a claim. But we are urging people to check their excesses this year, as they are going up.
“We’re also concerned that some drivers might agree to a higher voluntary excess, as a way of reducing their premium, without fully considering the full amount they may need to contribute in the event of a claim. Some drivers may be committing to a higher proportion of claims’ costs than they can afford. Volunteering to taking a higher excess only leads to a saving if you don’t need to make a claim.”
Research in 2020 found that excesses exceeding £3,000 were being quoted on older cars, despite the fact that the write-off value would be significantly lower. In the event of a total loss, the driver would receive nothing.
Click here to read more about car insurance excesses.
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