Learn The Basics of Car Insurance Excess in NSW

Car owners looking to buy car insurance must invest time in searching various vehicle insurance policies across insurers online. The hunt for the best car insurance doesn’t end there. Vehicle owners must first assess their vehicle usage, needs and value as well as their budget so they can eventually request and compare quotes from multiple insurers before purchasing a suitable insurance cover.

While buying car insurance online can be a cakewalk, understanding the terminology related to vehicle insurance policies may not be easy for everyone. Some car owners may have to look at the policy disclosure statements (PDS) back and forth to comprehend the inclusions and exclusions of their car insurance policies.

If you are a vehicle owner struggling to decode some terms in the PDS contact your insurer for assistance. Also, read this article that can help you puzzle out one such term, i.e., “Excesses.”

Car Insurance Excess

It is an out-of-the-pocket amount that you will need to pay towards an at-fault car insurance claim. While filing an at-fault claim, you must pay a standard/voluntary excess and other additional excesses based on the road event scenario leading to a claim.

For instance, if a young driver is involved in an at-fault incident while driving your car, you will need to pay your standard excess plus the young driver’s excess while making a claim.

The other common types of excesses are – unlisted driver excess, inexperienced driver excess, and driver history excess.

Check your insurance certificate to know your basic and other excesses. Also, know that you don’t need to pay the standard excess in the event of a no-fault claim.

What is the rationale behind collecting car insurance excess?

The main reason behind adopting car insurance excess is to do away with minor claims (of little value) that demand substantial administrative costs. Also, you must know that excesses affect your premiums. For instance, choosing higher excesses helps keep your premiums low.

When does an excess apply?

An excess will be applied to every at-fault claim you make. So, for the ‘N’ number of incidents you wish to claim for, you must pay ‘N’ applicable excesses.

What is the amount of basic excess to be paid?

The basic excess you will need to pay with a claim depends on the territory/state where your car is kept and used. At the same time, you can choose the level of excess while purchasing the policy. Note that selecting a higher excess can lower your premiums and vice-versa.

Is choosing a car insurance excess final and binding?

Suppose you own a comprehensive car insurance policy, you can log in to your car insurance account online and update your basic excess anytime you want to change it. Or you can even make a quick call to your insurer and ask them to do the needed.

When should I pay the car insurance excess?

  • If your vehicle can be fixed, you must pay the excess so the repair work can roll in.
  • If your vehicle is deemed a total loss, your insurer can deduct the excess from your final settlement amount.
  • If your vehicle is written off and you seek a new car replacement, you must pay the excess before your insurer moves on to replacing your vehicle.

Are excesses paid upfront or in installments?

Usually, the excess is paid in a lump sum. However, if you have financial constraints, you can ask your insurer if they can accommodate your request to pay in installments or extend the payment date. However, not all insurers may oblige such a request.

While these are a few common questions about car insurance excesses, you can easily reach out to your insurer using car insurance online support in case of queries. Whether or not your insurer is the best car insurance provider, there can still be multiple ways to seek assistance when required. Find the contact information in your policy’s PDS or your insurer’s official website to know all the available channels to get help. more