Understanding the Concept of Excess and Excess Protector in Motor Insurance

Motor insurance is a crucial aspect of owning a vehicle. It provides financial protection against unforeseen circumstances such as accidents, theft, or damage to your vehicle. When purchasing motor insurance, it is important to understand the concept of excess and excess protector, as they play a significant role in determining the cost and coverage of your policy.

What is Excess?

Excess, also known as a deductible, is the amount of money you are required to pay towards a claim before your insurance coverage kicks in. For example, if you have an excess of $500 and your claim is $2,000, you will need to pay $500, and your insurance company will cover the remaining $1,500. The purpose of excess is to discourage policyholders from making small and frequent claims.

Excess comes in two forms: compulsory excess and voluntary excess. Compulsory excess is set by the insurance company and is a fixed amount that you must pay in the event of a claim. Voluntary excess, on the other hand, is an amount that you choose to pay in addition to the compulsory excess. By opting for a higher voluntary excess, you can lower your insurance premium.

What is Excess Protector?

Excess protector is an optional add-on to your motor insurance policy that provides additional coverage for your excess amount. With excess protector, you can recover the excess amount you paid in the event of a claim, allowing you to avoid any out-of-pocket expenses.

Let’s say you have an excess protector and your claim is $2,000 with a $500 excess. Instead of paying the $500 out of your own pocket, your excess protector will cover this amount, and your insurance company will reimburse the full $2,000. This can be particularly beneficial if you have a high excess or if you frequently make claims.

Benefits of Excess Protector

There are several benefits to having an excess protector in your motor insurance policy:

1. Financial Protection: Excess protector provides an additional layer of financial protection by covering your excess amount. This can help you avoid unexpected expenses and maintain your financial stability.
2. Peace of Mind: Knowing that your excess amount is protected can give you peace of mind, especially if you frequently make claims or have a high excess.
3. Cost Savings: With excess protector, you can potentially save money in the long run. By recovering your excess amount, you can avoid paying it out of your own pocket and maintain a lower insurance premium.
4. Flexibility: Excess protector allows you to choose a higher excess amount, which can help reduce your insurance premium. This gives you the flexibility to customize your policy according to your needs and budget.

Considerations when Choosing Excess and Excess Protector

When selecting your excess and excess protector, it is important to consider the following:

• Financial Situation: Assess your financial situation and determine how much you can afford to pay towards a claim. If you have sufficient savings, you may opt for a higher excess to lower your premium.
• Claim History: If you have a history of making frequent claims, an excess protector can be beneficial in avoiding out-of-pocket expenses.
• Vehicle Value: Consider the value of your vehicle. If you have a high-value vehicle, it may be wise to opt for a lower excess and excess protector to ensure adequate coverage.
• Policy Premium: Compare the cost of adding an excess protector to your policy with the potential savings in excess payments. Determine if the additional premium is worth the added coverage.

By understanding the concept of excess and excess protector in motor insurance, you can make informed decisions when choosing your policy. Assess your needs, weigh the benefits, and consider your financial situation to ensure you have the right level of coverage and protection for your vehicle.