Do I need to pay the excess if the accident wasn’t my fault?
12/09/2018 So you’re now insured or have been for a while, but you still can’t wrap your head around what excesses are and how they work? Then this is for you. We referred to some real car insurers’ own definitions and explanations in an attempt to paint you a clearer picture of the world of excesses.
What is an insurance excess?
You will recall that we covered this bit when we looked at insurance policy schedules, but for the benefit of those who are new to Resolver, here’s a quick flashback:
“This is the amount you will have to pay should you claim from your insurer. This amount can vary depending on the circumstance of the claim. For example, if you are the regular driver of the vehicle your excess amount payable will be lower than if someone other than yourself had an accident with your car. The excess for the non-regular driver or someone under the age of 25 years old could be more so ensure you check if there are any differences.”
Excesses apply across different types of insurance, but car cover is the more popular insurance where excesses are especially a concern.
So, do you still have to pay the excess if the accident wasn’t your fault?
Unfortunately, yes. Many people make the mistake of thinking they won’t have to pay the excess or they are guaranteed a refund if they are involved in an accident which wasn’t their fault. By definition, a excess is the amount you pay when you submit a claim to your insurer, regardless of whether or not the cause of the loss was your fault.
However, you can claim your insurance excess back. Most insurers will have a department that specifically deals with excess claims and they will try and recover it from the guilty party on your behalf.
When can my excess payment not be recovered?
MiWay insurance lists the following instances of when an excess payment cannot be recovered:
- You don’t have the guilty party’s personal and/or insurance details
- The legal cost of recovery is more than the excess amount
- The guilty party is nowhere to be found
- The merits of the claim (based on the nature of the accident and the weighing of evidence) don’t justify the recovery
When will I have to pay an additional excess?
Depending on your insurer and risk profile, you may be required to pay an additional excess over and above you basic excess.
According to OUTsurance, who charges a fixed excess, these are some of the reasons why other insurers would usually require you to make an additional excess payment:
- You (or the driver if you weren’t driving the car when it was damaged) only has a learner’s license
- You claimed during the first three months (varies depending on your insurer and contract) of cover
- You claimed for the same type of incident in the same year
- Your driver’s license was obtained less than 24 months ago
- The regular driver of the car wasn’t driving at the time
Other factors include your age and the time at which the accident occurred. Of course, at the end of the day it depends on your insurer and the conditions included in your schedule. If you aren’t sure whether or not you could possibly need to pay an additional excess in the above or other circumstances, now would be a good time to review your policy.
Can I choose how much I want my excess to be?
While many insurance companies have a standard excess, some may give you the option to increase or decrease the amount. So generally it is possible to decide your own excess, but if you choose to have a lower excess, your premium will most probably be more expensive and vice versa. Remember that you will need to have this cash available in the event of a claim so insure you have put this money aside and have access to this cash.
While most insurers want to try and make life easy for you, sometimes it doesn’t always work out that way. If you feel you were unfairly required to pay an additional excess, want to opt for a higher excess payment or have any other issues with your insurer, then you have all the right reasons to contact your insurer or lodge a formal complaint using Resolver!
The biggest takeaway from this article is that the excess is payable as long as you claim. Sometimes you may be tempted, if your insurer gives you the choice, to do away with the excess because who wants to pay money on top of the premiums they’ve been paying for years right? Wrong. The excess could help you save on your premiums and avoid you making small and unnecessary claims.
As we know, insurance is one of those grudge purchases we hope we will never actually have to make a claim for and hopefully never have to actually pay the excess. It is for those who know that if the costs of repairing or replacing their vehicle or that of a third party are outweighed by what they can afford at any point in time, then they need to be covered for these unfortunate situations to ensure that their financial well being and lifestyle is not negatively impacted.