4 April 2018
Understanding your insurance policies – what you are and are not covered for, and what you need to do to make a claim – could save a lot of headaches, says Insurance & Financial Services Ombudsman, Karen Stevens.
“Insurance doesn’t cover you for all things at all times,” says Karen. “Understanding what you’re signing up to will help to avoid issues later on.”
Paying an excess on your claim is an issue for many people. “On average, 3,500 people contact us each year and about 10 percent of all general insurance enquiries are about having to pay an excess,” says Karen. “We monitor trends so we can better inform the industry and consumers about issues that can be better managed or, ultimately, avoided.”
“We explain to a lot of people that, in most cases when an insurance claim is accepted, you have to pay an excess.”
“One common cause of frustration is when people are not at fault in a car accident, but still have to pay an excess. If the other driver at fault is insured, and their insurer accepts they were at fault, the excess may be refunded and the no-claims bonus reinstated. But, in many cases, the only way to recover the excess is through the Disputes Tribunal."
The other common complaint about paying an excess is when people have to pay separate excesses for separate events.For example, when rooms in a house are damaged by two or more separate events, but claimed for at the same time, it is likely to result in two excesses.
An excess is a form of self-insurance. It helps to avoid too many small claims which would increase premiums for everyone who is insured. The amount of excess varies according to the type of insurance, and some policies will waive the excess in certain circumstances; for example, some car policies do not require an excess to be paid for a broken windscreen.
“Your insurance policy will say when you must pay an excess and how much it will be. Read your policy and ask your insurer for more details. Sometimes you can increase the excess payable as a way of decreasing your premiums.”
“The IFSO Scheme is an independent body which can provide unbiased information based on 23 years of experience. We encourage consumers to keep asking questions until they fully understand. Acting now will ensure you’re ready if you ever need to make a claim.”