what is the insurance deductible?
It is an agreed amount that you pay at the beginning of any claim you make.
Suppose you have collided with another car in the supermarket parking lot. your insurer will pick up the bill, but you must first pay an agreed-upon amount for the repairs.
Reading: What does excess mean on insurance
You will have one with all your insurance policies, except life insurance policies that do not carry a deductible. Your insurer decides on a mandatory deductible amount when you purchase your policy, but they can also choose to increase, and sometimes decrease, your deductible. Generally, the more excess you pay in the event of a claim, the less you’ll have to pay in premium, so it’s a matter of finding a balance between your monthly costs and how much you can pay if the worst happens.
what you have to pay versus what you choose to pay
- mandatory deductible is set by your insurer and is the lowest amount you can accept. Your insurance company will decide the level of excess by looking at your circumstances. For example, if you buy car insurance, the required deductible could be based on your age and driving record.
- voluntary deductible is set by the policyholder and is added to the mandatory deductible decided by your insurance company. If you agree to a higher level of excess, you can usually expect your monthly premiums to be lower, but that means you’ll have to pay more up front if you file a claim, so make sure you can pay what you agree to pay .
- car value
- claims history
- if you are in an accident with an uninsured driver, and you can provide your name, contact details and vehicle registration
- if someone else is filing a claim against you
Remember, you pay the excess at the start of a claim and you will need to pay both the mandatory and voluntary excess.
how it works
Imagine you have a £1,000 home repair bill. his mandatory excess is £150 and he has agreed to pay a voluntary excess of £200. that means you must first pay the entire £350 excess and the insurance company pays the remaining £650.
You usually pay the excess even if you’re not at fault, but your insurer will pay you back later if they can recover it from the responsible party.
make changes to your excess
You cannot change the required deductible amount on your policy. Your insurer obtains this figure by analyzing the risk factors that make accidents more or less likely.
Your voluntary deductible, on the other hand, can be changed or removed when you first purchase or renew your policy.
Be sure to check the fine print before you buy the policy, so you know exactly what excesses you’re accepting.
keep track of your costs
If you want to know what excess you will have to pay if you make a claim, you should refer to your policy details and terms and conditions.
excess at home
There are all kinds of accidents and other problems that are covered by home insurance, and each one has a different standard excess level. Don’t forget that we’re talking about a mandatory excess here: you can add an additional voluntary excess if you’re willing to pay more if an accident occurs.
For example, if one of your pipes bursts, this would be classed as a ‘leakage of water’ claim, which carries a mandatory deductible of £450. And if you were unlucky enough to sink, you could face a mandatory deductible of up to £1,000, depending on your property history or where you live. You should think about this when you’re deciding what level of voluntary deductible you want to pay.
excess on the road
With car insurance, the cost of the mandatory excess is based on factors such as:
For damage to the windshield, there is normally a small deductible to be paid separately.
With our auto insurance policies, your deductible depends first of all on the type of coverage you are paying for. the standard deductible for third party, fire and theft cover is £250, while the default cover for comprehensive policies is £350, although you can choose anything in the range of £150 to £1,050.
there are times when you don’t have to pay the excess like:
But sometimes you still have to pay up front, so you should always make sure the level of excess you’ve agreed to is an amount you can afford, no matter how safe a driver you are.