New research into what drivers are paying for their car insurance has revealed high excess figures are becoming increasingly commonplace.
Excesses that exceed £3,000 are being quoted on older cars, despite the fact the write-off value would be significantly lower.
That means, in the event of the car being a total loss, the driver would receive nothing.
Researchers at the Mail on Sunday searched for car insurance on moneysupermarket.com. The average car on UK roads is eight years old, so the search used one of the most popular used cars, a Ford Fiesta, registered in 2012, for a 40-year-old driver in South London.
The value of such a vehicle should be between £3,440, and £3,775. The write-off figure would be around 50 percent of this.
Six insurers came back with staggering £3,000 compulsory excess figures. These insurers were not even the cheapest, either.
The same surprise might be in store for owners of more expensive cars. An eight-year-old BMW 3 Series with a value of £7,000 to £7,500, generated five quotes with a £3,000 excess for a 40-year-old in Stevenage.
With the average car insurance claim costing £2,600, it pays to keep a close eye on what excesses are on your policy.
The British Insurance Brokers’ Association (BIBA) claims one of the reasons insurers offer high excesses is that they’d rather do so than decline insurance altogether. In short, such excesses are a get-around for ‘no-quotes’.
“Policy excesses are often misunderstood and can provide a nasty shock during a claim – a time when there is already enough stress to deal with,” said Anders Nilsson, from gocompare.com.
“Our research shows excesses could contribute to genuine financial hardship with 37 per cent of drivers admitting they don’t have the means to pay their excess or would have to turn to credit cards or loans.”
What is car insurance excess?
The excess on car insurance is what the driver pays before the insurer begins to contribute, in the case of repairing their own vehicle.
For example, consider a single-car incident and all that’s damaged is the front bumper and the driver’s sidelight. If the excess on their policy is £500, and the total cost of the damage is £800, to get the car back on the road, the insurer will contribute £300 to that.
If the damage is below £500, the insurer won’t contribute anything. The excess is only payable on damage to your own vehicle. Damage to other’s vehicles, and the associated costs, if you are at fault, is on your insurer.