Motorists warned of steep rise in policy excesses
As cost of policyholders’ contributions to claims increase by up to 47% - drivers are urged
to consider the total costs of car insurance
- The average compulsory excess for theft claims has risen by 47% in the last 12 months1
- Compulsory excesses for accidental damage and fire claims have increase by 26%, on average
- GoCompare Car Insurance’s free excess protection will pay-out up to £250 for qualifying car insurance claims2.
GoCompare Car Insurance is warning that motorists could be in for a very nasty shock if they are unlucky enough to need to put in a claim.
New research by the leading comparison website found that over the last year, the amount that insurers require policyholders to pay towards car insurance claims has risen significantly. Theft claim excesses have seen the biggest increase - the average policy excess has shot-up 47% from £182 in 2020 to £267 this year.
Compulsory excesses have also increased for accidental damage and fire claims. The average excess payable for an accidental damage claim has increased from £185 to £234 (a 26% increase), while fire claims excesses have risen by the same percentage from an average of £179 in 2020 to £226 in 2021.
A policy excess is the amount paid by the policyholder, or deducted from a settlement, whenever a claim is made. Compulsory excesses, set by insurers, depend on the type of claim being made, the insured’s age and driving experience and, the type of car. They are non-negotiable and insurers only process claims once the excess has been paid, whether the policyholder was at fault or not. Young and inexperienced drivers are often required to pay an additional compulsory excess on top of a policy’s standard excess.
Drivers also have the option to take a voluntary excess. They can choose to pay a higher contribution towards any claims, usually in exchange for a lower premium. If a claim is made, the voluntary excess is added to the standard excess(es). Drivers should only consider a higher voluntary excess if, should they need to make a claim, they can afford the total costs of the voluntary and compulsory excess. But drivers should ensure they can afford to pay the total excess, as this is the amount that they will have to pay in the event of a claim. Increasing the voluntary excess may well reduce the cost of the premium at the point of purchase, but the value of any claim must be equal to or greater than the total excess, otherwise the driver will have to foot the bill themselves.
GoCompare Car Insurance’s analysis also highlighted a huge range in the compulsory excesses applied to policies. For fire, accidental damage, and theft claims, depending on the policy they bought, drivers could be asked to contribute between £50 to £3,000.
Gocompare has been raising awareness about excesses over the past 18 months by giving away free £250 excess cover to every customer who buys a car insurance policy. Qualifying customers who need to claim on their car insurance policy can claim back up to £250 towards their excess.
Lee Griffin, CEO and founder of GoCompare Car Insurance commented, “When it comes to arranging their car insurance this year, many drivers will understandably be really focused on headline price. But it is important take a minute and check exactly what cover you’ve got and consider the total cost of the policy. Excesses can be a hidden cost. They can seem complicated and most people tend not to think about what will happen when they make a claim, but we are urging people to check their excesses this year, as they are going up.
“We’re also concerned that some drivers might agree to a higher voluntary excess, as a way of reducing their premium, without fully considering the full amount they may need to contribute in the event of a claim. Some drivers may be committing to a higher proportion of claims’ costs than they can afford. Volunteering to taking a higher excess only leads to a saving if you don’t need to make a claim.
“Shopping around for car insurance each year is the best way to ensure that you’re getting a good deal – without compromising on cover. As our analysis shows, this year, more than ever, it’s important to look at the whole cost of a deal rather than just the top-line price. Using a comparison website like GoCompare, allows you to compare both policy features and premiums. Currently, drivers shopping around for car insurance with us could save up to £2773 on their policy and benefit from our free £250 excess cover – a helping hand when they need it most.”
For more information on GoCompare Car Insurance’s free excess cover visit: https://www.gocompare.com/free-excess-protection-cover/
For further information please contact:
Gordon, Jason or Liz at MAW Communications on 01603 505 845
Keep up-to-date with GoCompare on Twitter; @GoCompare
Notes to editors
1Defaqto Matrix of 371 comprehensive motor insurance policies (13 January 2020) and 350 comprehensive motor insurance policies (13 January 2021) and a comparison between compulsory excesses payable on 13 January 2020 and 13 January 2021- instant and unbiased market and competitor intelligence, from independent financial researcher Defaqto. Percentages are rounded up to the nearest whole number. Averages have been calculated on policies which state a monetary figure.
2Offer applies to fully comprehensive policies and is open to anyone who buys a valid car insurance policy from GoCompare during the offer period. The policyholder must be 17 years of age or older and a permanent UK resident. The customer will qualify for the free excess protection cover for the duration of their car insurance policy (12 months max). Excess Protection Insurance is provided by a separate policy, underwritten by AXA Assistance (UK) Ltd.
3Based on independent research by Consumer Intelligence during 1 August to 31 August 2020: 51% of consumers could achieve a saving of up to £277.17 with GoCompare car insurance based on a comparison of 31 companies.
GoCompare is a comparison website that enables people to compare the costs and features of a wide variety of insurance policies, financial products and energy tariffs.
GoCompare does not charge people to use its services, and it does not accept advertising or sponsored listings, so all product comparisons are unbiased. GoCompare makes its money through fees paid by the providers of products that appear on its various comparison services when a customer buys through the site.
When it launched in 2006, it was the first comparison site to focus on displaying policy details rather than just listing prices, with the aim of helping people to make better-informed decisions when buying their insurance. GoCompare has remained dedicated to helping people choose the most appropriate products rather than just the cheapest, and has teamed up with Defaqto, the independent financial researcher, to integrate additional policy information into a number of its insurance comparison services. This allows people to compare up to an extra 30 features of cover.
GoCompare is the only comparison website to be invited to join the British Insurance Brokers’ Association (BIBA) and is authorised and regulated by the Financial Conduct Authority (FCA).