Let's face it, insurance can be confusing and a lot of us simply take out our insurance policies without having much understanding of what it all means. When it comes to insuring your works vehicle, it's important that you have a good understanding of your policy. In particular, you have to understand what your vehicle excess is and when you have to pay it.
What is Insurance Excess?
Insurance excess on your car insurance is the amount of money you need to pay each time you make a claim. For example, if your excess is $500 and you make a $1,500 claim, your insurer will pay $1,000 and you will be responsible for the remainder.
There are a number of different types of vehicle insurance excesses including:
- Standard excess - This is the standard amount you'll need to pay when you make a claim. The amount of excess generally differs depending on which State you live in. Remember, you'll generally have to pay more excess if it involves a driver who is not on your policy, called an undeclared driver, so it's important to check your policy carefully.
- Voluntary excess - You can opt to pay an increased excess at claim time as this will reduce your premiums. If you go for this option, make sure the amount you've agreed to pay is affordable. If your work vehicle is quite old, you don't want to be paying more excess than the car itself is worth!
- Age/inexperienced driver excess - Often a higher excess will apply to younger, less experienced drivers. Generally, the age excess will cease once a person reaches 25 years of age but again this will depend on the policy. This includes nominated drivers so remember this if you've nominated one of the younger guys at work to drive your vehicle.
- Glass/windscreen excess - There is sometimes an excess on glass or windscreen replacement, although many policies offer free or reduced rates with a higher premium.
There may be other forms of excess so be sure to check your car insurance policy closely or have a chat to your insurance broker for extra info.
When Do You Pay Excess?
Generally, you don't need to worry about paying your excess until you make a claim for repair or replacement. Often you won't be required to pay any excess if you're not at fault or the insurer will reimburse you any upfront costs. The amount of excess you'll need to pay depends on your policy, your accident history, your age and a number of other factors. Remember, you might be up for a couple of kinds of excess depending on the incident. Have a close look at your policy to see how much excess you're up for so you don't have any nasty surprises at claim time.
If you want to reduce your excess, some policies will allow you to increase your premiums. However, this is generally a costly way to go as it can increase your regular payments by a significant amount.
For further questions on car insurance, contact All Trades Cover on 1800 826 850 or fill in our easy online form.