The EXCESS is a fixed amount set at the beginning of a contract, which the insured must assume at his own expense to cover the cost of the damages generated by an accident, according to the contract previously agreed with the insurance company.
When taking a car insurance policy, we normally have the possibility of choosing with or without an excess.
Here we show you an example to make it easier to understand and see how the excess works in a car insurance policy.
An insured has a car insurance policy with an excess of 200€. He suffers an accident, and the value of the repair is 700€. As his excess is €200, the insurance company pays €500, and the rest of the amount is paid by the insured. This procedure repeats everytime you make a claim to the company.
Although paying an excess with each claim may seem unfavourable, it is actually a beneficial deal from a financial point of view. The cost of an insurance with an excess is usually cheaper, so, as long as there are not too many claims, the total amount paid by the insured in the long run is lower compared with one without an EXCESS.
Full cover with or without EXCESS?
The difference between a full cover car insurance with and without EXCESS is that in the event of an accident, the person who has full cover insurance without EXCESS does not have to pay any additional amount, but rather the company assumes all the costs both for his own vehicle and for the other vehicle involved in the accident.
While in the case of all-risk car insurance with excess, it is the policyholder who must pay a fixed amount, previously agreed in the policy, in order to be able to repair his vehicle.
The choice of insurance with or without excess will depend on several factors: the use of the vehicle, the area of circulation, its value, the experience of the driver, etc… At Boracay Brokers we are experts in car insurance and we will be happy to advise you.