Car Insurance Excess

Car Insurance Excess: Understanding and Choosing the Right Amount

Car insurance excess is an important aspect of your insurance policy that many drivers in Ireland may not fully understand. In this guide, we'll explain what excess is, the different types of excess, and how to choose the right amount to suit your needs and budget. By understanding your car insurance excess, you can make better decisions about your policy and potentially save money on your insurance premiums.

What is Car Insurance Excess?

Car insurance excess is the amount you agree to pay towards a claim before your insurance provider covers the remaining costs. In other words, it is the portion of the claim you are responsible for, with the insurance company covering the rest. The purpose of an excess is to reduce the number of small claims and encourage policyholders to take better care of their vehicles.

Types of Car Insurance Excess

There are two main types of car insurance excess: compulsory and voluntary.

• Compulsory Excess: This is the minimum amount set by your insurance provider that you must pay towards a claim. The compulsory excess amount can vary depending on factors such as your age, driving experience, and the type of vehicle you drive.
• Voluntary Excess: This is an additional amount that you choose to pay on top of the compulsory excess. By agreeing to pay a higher voluntary excess, you can often lower your insurance premium, as it reduces the risk for the insurance company.

How to Choose the Right Car Insurance Excess

Choosing the right car insurance excess can be challenging, as it requires balancing your budget and your risk tolerance. Here are some factors to consider when deciding on your excess amount:

• Affordability: It's important to choose an excess amount that you can comfortably afford in the event of a claim. Remember that if you set your voluntary excess too high, you may struggle to cover the cost if you need to make a claim.
• Risk tolerance: Consider your personal risk tolerance when setting your excess amount. If you are a careful driver with a low likelihood of making a claim, you may be more comfortable with a higher voluntary excess, which could lower your premiums. However, if you're concerned about the potential cost of a claim, you may prefer a lower excess amount.
• Vehicle value: The value of your vehicle can also influence your excess decision. If you drive an older or lower-value car, you may not want to set a high voluntary excess, as the potential savings on your premium may not be worth the increased cost in the event of a claim.

Tips for Choosing the Right Excess Amount

Here are some tips to help you choose the right excess amount for your car insurance policy:

• Shop around and compare quotes from different insurance providers, taking note of the compulsory and voluntary excess amounts offered.
• Consider your personal financial situation and how much you can afford to pay towards a claim.
• Take into account your driving habits and history. If you have a good driving record and are confident in your abilities, you may be more comfortable with a higher voluntary excess.
• Factor in the value of your vehicle and whether a higher excess makes sense in relation to its worth.
• Remember that increasing your voluntary excess can lower your premium, but don't set it so high that you won't be able to afford it in the event of a claim.

Changing Your Excess Amount

If you find that your current excess amount is not suitable for your needs or budget, you can often change it at your policy's renewal or when you switch to a new insurance provider. Keep in mind that increasing your excess may lower your premium, while decreasing it may result in a higher premium. It's essential to strike the right balance between affordability and risk.

Car Insurance Excess and Claims

When making a claim on your car insurance policy, it's important to understand how your excess will affect the process:

• If the cost of the claim is less than your total excess amount (compulsory plus voluntary), you will be responsible for the entire cost, and your insurance provider will not contribute.
• If the cost of the claim is more than your total excess amount, you will pay the excess, and your insurance provider will cover the remaining costs.
• In some cases, your insurance provider may waive the excess if the accident was not your fault and the other party's insurer accepts liability for the claim.

Understanding your car insurance excess and choosing the right amount is crucial to ensure you have the coverage you need at a price you can afford. By considering factors such as affordability, risk tolerance, and vehicle value, you can find the right balance between excess and premium costs. Don't hesitate to shop around, compare quotes, and ask questions to ensure you fully understand your policy and your excess obligations.

Official Irish Websites for Additional Information

For more information on car insurance excess, consider visiting the following official websites:

• Competition and Consumer Protection Commission (CCPC): The CCPC offers guidance on car insurance, including information on factors that affect premiums and how to shop for coverage.
• National Driver Licence Service (NDLS): The NDLS provides information on driver licensing in Ireland, including requirements for modified car owners.
• National Car Test (NCT): The NCT website offers details on vehicle testing requirements, which can be particularly important for modified car owners to ensure their vehicles meet safety and roadworthiness standards.
• Revenue.ie: This site provides information on Vehicle Registration Tax (VRT) in Ireland, including details on how modifications can affect VRT rates.