Many insurance policyholders in South Africa struggle to understand what insurance excess is. They don’t understand why they have to pay this and especially how they can get their hands on these funds if they were not to blame for the accident resulting in the insurance claim.
Insurance excess is the first amount payable by you in the event of a loss, and is the uninsured portion of your loss, so when you submit a claim you’ll have to pay an excess. It usually has to be paid to the garage fixing your car once it is repaired before you can drive it away.
When you have to pay an excess for damages arising from an accident, it is irrelevant who was to blame for the accident, this serves to deter customers from submitting minor claims and/or fraudulent claims, and keeping premiums down.
An insurance excess is an agreed amount of money that you the client is liable to pay in the event of a car insurance claim being settled. I.e. if your excess on your car is R4,000 and the damages amount to R50,000 the insurer will pay the remaining R46,000 once you the client has paid your excess to the repairer.
When you are comparing car insurance online, try choosing to pay a higher excess as a way of lowering your premium. Voluntary excess is the amount you must pay towards a claim on top of your compulsory excess. The amount of voluntary excess is selected by the consumer when they take out their policy, and a higher voluntary excess usually means a lower premium.
It is important to note that the administrative cost of a car insurance claim is the same, regardless of who is at fault. If you are not at fault, you can still claim the excess amount back from the guilty party. Unfortunately, this can take a long time, especially if the guilty party isn’t insured.