Up to 10 percent of calls received by the Insurance & Savings Ombudsman are questions about insurance excesses.
“Many consumers are frustrated about having to pay an excess on their insurance claim,” says Insurance & Savings Ombudsman Karen Stevens. “But in most cases when you make an insurance claim and the claim is accepted, you will need to pay an excess.”
“The two main issues for consumers are having to pay the excess when they are not at fault in a car accident; and paying separate excess amounts for separate events,” says Karen.
“We hear from many people who have to pay the excess when their car has been damaged by another driver. If the other driver was insured, and their company 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 amount is to take the other driver to the Disputes Tribunal."
Separate events result in separate excess amounts. “For example, landlords find their rental properties are damaged – and because the damage has been caused on separate occasions, there is likely to be separate excess amounts to pay. Similarly if a car was scratched on two separate occasions, this could mean two lots of excess.”
“Excess is a form of self-insurance,” says Karen. “It helps to avoid too many small claims which would increase premiums for everyone who is insured. You can even choose to increase your excess and pay a lower annual premium, if you want to increase the “self-insured” component of cover.”
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 for a broken windscreen.
“Your insurance policy will spell out when you must pay an excess and how much it will be. It is really important to read your policy document, and ask your insurer for more details.”
See our Policy Excesses information sheet.