Customers arranging car insurance through GoCompare are set to benefit from financial assistance aimed at reducing the cost of making a claim, as part of an innovative campaign to raise awareness of insurance excesses.
GoCompare Car Insurance is giving away free £250 excess cover to every customer who buys a qualifying car insurance policy. Customers who need to make a claim on their car insurance policy will be reimbursed up to £250 excess when their car insurance claim has been settled.
Research commissioned by GoCompare has revealed that excesses are among the least well-understood elements of car insurance. Excess-related terms came towards the bottom of a list of 16 common car insurance terms – ‘compulsory excess’ came in twelfth place and ‘voluntary excess’ came eleventh.
What is an excess?
An excess is the amount you’ll have to pay upfront towards a claim you make on your insurance. There are two main types – compulsory and voluntary, which combined make up the ‘total excess’. The compulsory excess is set by the insurer and will vary depending on several factors including the age and experience of the driver and the type of car insured.
The voluntary excess is chosen by the policyholder. To reduce the cost of their premium, some drivers agree to make a larger contribution (voluntary excess) if they need to claim. However, in the event of a claim, this voluntary excess is added to the insurer’s compulsory excess – meaning these drivers will pay a higher amount towards the cost of a claim.
The amount of the excess will depend on the nature of the claim, for example, whether it is for fire, theft or accidental damage. Insurers will only process claims once the excess has been paid, whether the policyholder is at fault or not.
Millions of motorists are caught out by excesses
Just over a third of the drivers (35%) surveyed said they bother to check the policy excess level when arranging insurance for their car.
The research also revealed that:
- Only 46% of drivers who have recently made a claim expected to pay an excess.
- One in ten hadn’t appreciated just how much they had agreed to contribute.
- While a significant minority (6%) hadn’t realised that they would have to pay anything towards the cost of their claim.
The survey also looked at what, if any, arrangements drivers had in place if they were unfortunate enough to have to claim on their insurance:
- Only 30% of drivers would be able to afford to pay the excess out of income.
- 22% said they would use a credit card.
- A third would have to raid their savings.