The Ultimate Guide to Car Insurance Excess
Read Time: 5 mins
If you’re planning to buy car insurance for the first time, you may want to become familiar with the term car insurance excess, also known as deductible. So, what is car insurance excess, and how does it impact your car insurance claim? This handy guide will answer all these questions and provide you with valuable tips on making the right decision.
What is Car Insurance Excess? (Meaning)
Car insurance excess is the money you pay when submitting a claim to your car insurance company. A certain amount will be deducted from your claimed insurance money if you’re at fault for causing the damage to your car, also called the deductible.
Several other factors can affect the excess variable (such as your car model, driving experience, and age). For example, if you’re a driver below the age of 30, you would have to pay an additional excess amount as per the policy.
How Does Car Insurance Excess Work?
The car insurance excess works like this: if you are granted the excess of 400 SGD and the costs to repair are 2000 SGD, you’ll need to pay the 400 SGD while the insurance company covers the rest.
The remaining 1600 SGD will be paid out to the respective workshop or 3rd parties.
To ensure that claims and costs are dealt with fairly, various policies for car insurance excess are introduced to you and implemented. Policies vary from company to company. This is a way for both the car owner and insurer to agree on the costs. In some cases, it will be dependent on other parties if they are partially or fully responsible for the damages that were done to your car.
Types of Car Insurance Excess
There are two major types of car insurance excess;
- Voluntary Excess and
- Compulsory Excess
- Compulsory excess: This is a fixed amount that an insurance company/insurer sets based on several factors, such as your car model, driving experience, or age. You do not have control over this excess. For example, expensive cars would carry a higher compulsory excess than a cheaper model car.
- Voluntary excess: This amount is charged on top of the compulsory excess when you make a claim. As the name suggests, you can choose how much to pay as excess. You might bring your premium down if you increase your voluntary excess, but you would have to pay it while making a claim. If you think you’re a safe driver and are confident enough, go with paying a higher excess. You can decide either to increase or decrease the lot according to your preference.
What Excess Should You Choose for Car Insurance?
Now that you’re familiar with the types of car insurance excess and the factors affecting them, your next question might be: “What would be the best car insurance excess for me to choose?“
The better way to go about this is by knowing your car from top to bottom and choosing the best car insurance company like DirectAsia Insurance. Our company has exceeded the average customer satisfaction score, i.e., 98%. We also facilitate our clients with a claims expert to guide them through the claims process.
Furthermore, you’ll need to be familiar with the excess policies and how they can impact you. For example, if your vehicle is an SUV and you drive around fairly-safe areas, you can go for voluntary excess, which is optional. Still, it would help you choose an excess limit that will let you cover a preferable portion of the claim on top of the compulsory excess. If your car is the standard type and you drive around hazardous areas, compulsory excess would help you cover an amount fixed by the insurer. The insurance company will assist you in figuring out the policies and will cover the cost according to “who is liable for the accident?” or varying on other factors.
All in all, it will depend on you. Both excess types can help you make sure you’re driving safely and securely with an insurance plan covering all the bases. Therefore, you should consider all the factors as well as decide your preference to choose the excess.
When Do You Pay Car Insurance Excess?
In general, the time to pay car insurance excess is when you’re making a claim regardless of who is responsible, but it’s mainly linked to you. From car crashes to fire accidents, it can depend on many factors. If you are accountable for causing the damage to your own car or others, that is when you pay the excess amount.
However, if the harm was done by another party and they take responsibility for it, the excess can be waived. But it can also depend on the insurance company’s policies, so it’s best to remain prepared for the deductible.
When Car Insurance Excess Is Not Applicable?
There are a few situations you need to know before choosing your excess. You must be aware of when the excess policy won’t be applicable.
If your car’s repair cost is lower than your excess, you won’t be able to claim your insured proportion. For example, if a part of your car repair costs you 50 SGD and your excess limit is 100 SGD, then you’ll not be able to claim your car insurance because the actual cost would be lower. Other factors are in play as well and will depend on the insurance company you partner up with.
Ultimately, your vehicle excess insurance will save you a lot of money. Choosing a reliable insurance company that offers a better deal would be your best option. As mentioned before, DirectAsia is the most affordable car insurance company, which will lend you a listening ear of a claim specialist and help you clear any confusion regarding the policies or anything else you want to learn about car insurance excess. We are well known for providing great service with a higher rate of customer satisfaction achieved. So, if you’re looking for a beneficial as well as a cheaper insurance company that comes with better excess policies, DirectAsia is the way to go. Reach out to us now!
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