Car Insurance Buyers Guide: The
Voluntary Excess
Car insurance buyers have the option to increase the voluntary excess,
that is, the amount that they will pay themselves in an accident. The
disadvantage to this, of course, is that an accident will cost them
more but it may help to decrease the cost of the car insurance
premium.
In some case, however, incresing
the voluntary excess may increase the cost of car insurance. This
is because those that choose to increase their voluntary excess have
been found to be more likely to have an accident. This is largely
because younger drivers, with less cash and more costly car insurance,
are more likely to look to ways of reducing the cost of cover than
other agegroups and they are at highest risk of a crash.
Price comparison sites very often automatically add a voluntary excess
to some car insurance policies that they show you to decrease their
cost. In the past, they didn't always make this clear but now, under a
recent code, drawn up by, among others, the Association of British
Insurers (ABI) which has been largely complied with by price comparison
sites, they now tend to make it clear what the excess is for each price
quoted.
If you use a price comparison site to find your car insurance - and
most of us do - make sure that you check the excess. It can be quite
high (perhaps £500 or more) for the cheaper policies.
Whether or not you decide to increase your voluntary excess is a
personal choice. A modest increase in a driver that has been claim-free
for many years, assuming it does drop the cost, may be acceptable. For
a younger driver, it's a higher risk choice as they are more likely to
need to claim.
If you are interested in a voluntary excess, it makes sense to try
several different levels to see what impact it has on the price of
cover. In fact, unless you push it up by many hundreds of pounds, the
impact on the premium is relatively small, which begs the question
whether it makes better sense to avoid having a voluntary excess at
all.
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