Car Insurance, Essential Information About Excess Payments
An excess payment is the fixed contribution you must pay each time your car is repaired through your car insurance policy. Normally the payment is made directly to the accident repair garage when you collect the car. If your car is declared to be a write off, your insurance company will deduct the excess agreed on the policy from the settlement payment it makes to you.
If the accident was the other drivers fault, and this is accepted by the third party’s insurer, you’ll be able to reclaim your excess payment from the other person’s insurance company. But what if the other driver is uninsured?
All motorists know that it’s a legal requirement (under Section 143 of the 1988 Road Traffic Act) to have insurance for any damage they cause to third parties. But still many drive without insurance. An estimate of the incidence of uninsured driving in the UK is hard to come by and, for the obvious reasons, those drivers involved in breaking the law have every reason to keep quiet about it.
Calculations from the Department of Transport suggest that in the UK around 5% of vehicles are being driven without valid insurance. This group of people not only impose costs on honest motorists in the form of higher premiums, but their presence on our roads also represents a serious risk to other road users. Consequently, uninsured driving is increasingly being regarded as a major social problem.
But driving without insurance is not a victimless crime. If you have an accident with an uninsured driver and the accident wasn’t your fault, the repair costs will be paid for by the Motor Insurers’ Bureau that’s funded in its entirety by the industry, or by your insurer. Therefore, if you’re involved in an accident caused by an uninsured driver you’ll eventually get you car repaired but you’ll still have to pay the excess and there’ll be no one to reclaim your excess from.
What is a Compulsory Excess?
A compulsory excess is the minimum excess payment your insurer will accept on your insurance policy. Minimum excesses do vary according to your personal details and driving record and by insurance company. Today the average excess is around 100, but younger drivers could be faced with excesses of up to 500 – whilst more mature, experienced drivers with a good driving record, could be offered an excess of just 50.
So what is a Voluntary Excess?
In order to reduce your insurance premium, you may offer to pay a higher excess than the compulsory excess demanded by your insurance company. Your voluntary excess is the extra amount over and above the compulsory excess that you agree to pay in the event of a claim on the policy. As a bigger excess reduces the financial risk carried by your insurer, your insurer I able to offer you a significantly lower premium.
The garage has repaired my car but it won’t release the car too me until I pay the policy excess to them. Is this right?
Yes, that is normal practice. But make sure you inspect the car when you collect it. Satisfy yourself that the repair is perfect. Then make sure you keep their receipt for your excess payment as you will need this if you’re reclaiming against a third party’s insurance. And just in case there’s a dispute, it’s a good idea to make sure the repair garage gives you a repair schedule. This will list all the repairs that were made to you car.
Car Insurance. Uninsured Cars To Be Crushed
Are you one of the one in twenty motorists who regularly drive without insurance? You’d better watch out – your car could be heading for the crusher and shipped off to the world’s biggest scrap smelter in China!
New powers now allow the police to seize, impound and crush any car found on the road without insurance. A pilot scheme was introduced in Durham last spring. Since then, police have impounded more than 1,200 cars. Of those around half have been crushed into cubes and packed off for smelting.
Operation Takeaway as the pilot scheme was known, has been such a big success, that police forces throughout the UK are enthusiastically polishing up their tow trucks. The scheme is now supported by a new national police database that’s supported by the insurance industry. It enables the police to check the insurance status of every car in the UK whilst they’re sitting in their patrol car.
Now if you’re caught red handed without car insurance you’re forced to hand your keys to the police at the roadside. There are no exceptions – this applies to everyone; it doesn’t matter if it’s just a forgetful mistake or conscious driving without insurance.
Then you’ll have to get your skates on! You’ve just 14 days to produce a valid insurance policy to the police and collect your car. And other costs mount up. Before you can collect your car, you have to pay the cost of kerbside recovery (around 105) and the cost of secure storage – and that could easily amount to 15 a day. So, if you leave collecting your car to the 14th day, you could be in for a bill for 315.
And if you don’t reclaim your car, off to the crusher it goes!
During the pilot scheme, the cost of crushing the cars was partly funded by Direct Line. They have estimated that Operation Takeaway prevented up to 2,000 accidents. And many of the cars impounded by the police were found to be un-roadworthy.
A police spokesman said, Uninsured drivers are often guilty of many other offences. Such as having neither driving licence nor MOT certificate. We are doing everything in our power to get these dangerous and illegal drivers off our roads.
Indeed, uninsured drivers are much greater problem than many of us would expect. The Department of Transport recently reported that 1 in 20 motorists regularly drive without insurance. Furthermore, research from the Association of British Insurers discovered that uninsured drivers are amongst the most dangerous on the roads. On average they cause one accident every six months and are three times more likely to be convicted of driving without due care and attention.
And who pays for those uninsured accidents? We do! The average car insurance premium is loaded by 30 to cover the cost of damage caused by uninsured motorists. Across the UK that adds up to an extra 500 million paid out each year by the law-abiding motorists!
But that’s not the end of our financial pain. If an uninsured vehicle collides into your car, it’s still recorded as a fault claim on your policy. This means you’ll have to pay the excess when your car is repaired and unless you’ve got Claims Protection on your policy, your no-claims bonus will take a knocking. Over a two-year period, the reduction in your no claims bonus could easily cost 275 in higher premiums.
The move to take cars off the road and crush them has been warmly welcomed by the Association of British Insurers. The ABI has long criticised the leniency of punishment handed out by the courts to uninsured motorists but they still want tougher penalties. Offenders are typically fined just 150 to 200 – with time to pay – and this is much less than the average car insurance premium. Surely this cannot be true justice!
