Car Insurance Excess Payments Explained

Car Insurance

Being a responsible driver comes with the peace of mind that, should you get in an accident, you are covered by your car insurance and most likely have very few incidents on your driving record.

That said, there are still some aspects of car insurance that not all good drivers are knowledgeable about. For example, one term that can be confusing to new and experienced drivers alike is “excess payments.” Have you recently been in an accident and need to file a claim with your insurance provider that includes excess payments? If so, let’s take a look at what this term means in regard to your policy and how it will affect you as a motorist.


Excess Payments Explained

What do excess payments mean on your insurance policy?

While the term “excess payments” can evoke feelings of anxiety as you imagine higher premiums and spending large amounts of money on accidents, the truth is that you do not have to be concerned about this. Excess payments refers to the amount of money that you will pay upfront when you file a claim with your insurance provider. The amount you pay will ultimately depend upon your insurance provider and the policy that you have, which we will cover further down below.

How much will I have to pay in excess payments?

The amount that you will have to pay in excess payments will depend upon your insurance policy and the average rates (along with any additional factors surrounding your policy and the accident that you are filing a claim for). For example, your basic excess payment may be around $600 for an at-fault accident. This payment, plus any other excess payments that you may need to pay based on your claim, will cover part of the damages while your insurance will pay the remaining amount.

The basic excess payment is not the only payment that you will need to take into consideration. Some other factors that will raise this claim payment include:

  • The age of the driver (those who are younger than 25 can expect to pay more when they file a claim)
  • The amount of time that you have held your license (for which you may pay more if you have had your license for less than two years)
  • An unlisted driver has caused the accident
  • You have gone over a certain annual mileage as stated by your policy

Generally, only a basic excess will be required for things such as a stolen vehicle or vandalized property. If you were involved in a no-fault accident, the good news is that you will not have to pay any excess payments at all!

How do excess payments affect my car insurance premiums?

Another major point of concern for good drivers is how excess payments impact the car insurance rate they currently pay. This is, again, another area that will change based on your individual situation. For example, if you are paying low excess payments, you may expect to see higher premiums due to the lower amounts you have to pay when you do make a claim. If you decide that you want to pay higher excess payments (which may be great for those who drive safely and do not expect to get into an at-fault crash), you can expect to pay a lower premium. Put simply, the amount of excess payments you settle on only affects your premiums when you are choosing how much you pay, not after an accident occurs.

Understanding each component of your car insurance policy and how it affects you as a driver is important, especially when it comes to excess payments. However, comparing all of the plans available in your area can be a difficult task. Are you currently looking for the right policy to provide you with affordable premiums and excess payments but don’t know where to begin? If so, you cancompare car insurance with iSelectto find the right insurance policy for your needs.