Compulsory Excess
An excess is the amount of money that you must contribute toward the cost of any insurance claim you make—it is the part of the risk that you carry yourself, the balance will be paid by the insurance company. Compulsory means “required by law or an authority” so a compulsory excess is the amount that you agree to pay, in terms of your contract, should you claim against the benefits of your policy. Excess is also often referred to as “the first amount payable.”
Insurance companies will also apply additional or higher compulsory excesses in the case of high risk insurance events or items. For example, drivers under the age of twenty five years will not only pay more for their insurance but they will also have higher compulsory excess limits applicable to their car insurance policies.
Always make sure that you are fully aware of what excesses apply to your car insurance policy. Making small claims where the excess is high will not be worth it as it also affects your no-claim bonus negatively.
The various risks covered in a car insurance policy will each have their own compulsory excess, for example the excess on a car radio may be more than that of window glass. Certain insurers will allow you to pay an additional amount each month, added to your premium and in return no excess will be payable by yourself.