Car Insurance Excess
Excess is another car insurance term you should know. The more knowledgeable you become about insurance, the better you can protect yourself and your assets. Car insurance excess is a source of much confusion for many drivers so we hope to shed more light on the topic.

What is car insurance excess?
Excess is the amount you will need to pay before your insurance company will pay the rest of your claim. It is your part of the claim and is also known as “first amount payable” in insurance terms. Excess was designed to encourage drivers not to make small, unnecessary and sometimes fraudulent claims. Small claims are administratively expensive and insurance companies hope that having to pay an excess will instill a feeling of responsibility with insured clients.

Types of excess
Excess can be divided into three categories. The first category is the standard or compulsory excess. In your car insurance policy schedule the excess will be specified for each area of cover, for example windscreen, window glass, car rental, personal injury or accident damage. There is no standard rate for excess, certain items carry a higher excess than others.

The second category is an additional excess payable under certain conditions. Examples are: drivers under the age of 25, if the driver is a learner driver, or if the car was driven outside South Africa.

The third category is called a voluntary excess. You can choose to pay an additional excess in case of a claim. As you are now accepting a bigger portion of the responsibility you will benefit in the form of a reduction in your monthly premium. If you decide to do this make sure you will be able to pay the higher excess should this become necessary. A good suggestion, if you are financially disciplined, is to put the amount you are saving, by accepting a higher excess, into a savings account. That way you will have the excess amount available should you have to claim.

Saving money with car insurance excess
To make excess work for you, read the fine print. If you fall into a high risk category (e.g., being a young driver) your excess may double. If your tail light is damaged in an accident, it is probably not worth claiming from your insurance because your excess will be more than the value of the tail light. It will never be in your best interest to claim if your excess almost equals the cost of the damage. Remember even small claims affect your no-claim bonus and you don’t want to do that. When you have a no-claims record of three years or more that will bring about a further reduction in your premiums.

Shop around
Before taking out car insurance, shop around and compare premiums and excess costs. There are many comparative insurance web sites on the internet. By completing an online quote request you will get a number of car insurance quotes to compare. Your details and those of your car determine your premium and excess. A typical online quote asks the following questions:

1. Where you live (is this a high risk theft area)
2. Age (are you a young and inexperienced driver)
3. Gender (women generally pay lower premiums)
4. Marital status (single people are more likely to claim more because they have a more active social life)
5. Make and model or the car (a top-of-the-range model will invite higher premiums)
6. Sound system details (accessories increase your premiums)
7. What type of cover you want (comprehensive cover will cost more than 3rd party)
8. Number of claim-free years you have had in the past (always aim for a no-claim history – it will pay off in the long run)
9. Where your vehicle will be parked overnight (a lock-up garage will reduce the premium.)

Put your knowledge of car insurance excess to good use.