Car Insurance Essential Information About Excess Payments
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Car Insurance: Essential Information About Excess Payments
Overview
Understanding excess payments in car insurance is crucial. Simply put, an excess payment is a fixed amount you must pay each time your car is repaired through your policy. Typically, this payment is made to the repair garage upon collecting your vehicle. If your car is deemed a write-off, your insurance provider will deduct this excess from the settlement they pay you.
If another driver is at fault and their insurer acknowledges this, you can reclaim your excess payment from them. But what if the other driver is uninsured?
Uninsured Drivers
All motorists are legally required to have insurance under Section 143 of the 1988 Road Traffic Act. Despite this, many drive without coverage. Estimates suggest that around 5% of vehicles in the UK are uninsured, posing both financial burdens and safety risks to law-abiding drivers. Uninsured driving is not a minor violation but a significant societal issue.
Accidents Involving Uninsured Drivers
If you are involved in an accident with an uninsured driver that isn't your fault, the repair costs will be covered by the Motor Insurers' Bureau (funded by the industry) or by your insurer. While you will eventually have your car repaired, the excess payment will still come out of your pocket with no possibility of reclaiming it.
Compulsory vs. Voluntary Excess
Compulsory Excess
A compulsory excess is the minimum amount your insurer requires on your policy. This amount varies based on personal details and driving history. On average, it is around £100, but it can be as high as £500 for younger drivers. More mature drivers with good records may have a lower excess of around £50.
Voluntary Excess
Opting for a higher voluntary excess can lower your insurance premium. This is the additional amount, on top of the compulsory excess, that you agree to pay when making a claim. By increasing your voluntary excess, you reduce the financial risk for your insurer, allowing them to offer you a lower premium.
Collecting Your Repaired Car
It's standard practice for garages to request the excess payment before releasing your car. Before making this payment, inspect your vehicle thoroughly to ensure the repairs are satisfactory. Keep the receipt, as it may be needed if you need to reclaim against a third party's insurance. Also, request a repair schedule from the garage, listing all the work done, to prevent potential disputes.
By understanding these aspects of car insurance excess payments, you can navigate claims more effectively and make informed decisions about your coverage.
You can find the original non-AI version of this article here: Car Insurance Essential Information About Excess Payments.
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