If you are new to the world of car insurance, you might be wondering what the term ‘excess’ means. The good news is that it is actually pretty simple. When you pay for car insurance, your insurer is contracted to pay for a certain amount of damage that is done to your car. There will always be cases, however, where you will have to come up with some of the money to repair or replace your vehicle on your own, and this is called excess.
Basically, anything that is not covered by the car insurance company is included in excess, but it comes in a couple of different forms. The first type of excess is called a deductible, which is a fee that you must pay in order for your insurance to function. The reason for the deductible is to prevent people from claiming every little problem with their car, as this could get expensive for the car insurance company.
Your deductible is set by your car insurance rates, so you must be aware of your options before you accept a final agreement. For example, if you want a lower deductible, your car insurance rates will be higher than if you want a lower amount. This means that when you choose an insurance policy, you are taking a certain amount of risk based on how likely you believe that you are to get into an accident.
Another type of car insurance excess occurs if you are ever underinsured, which makes it completely necessary to take a high level of coverage, just in case you are in an accident. While you might be able to secure some lower rates by waiving certain portions of your coverage, it is usually not worth it in the long run because so many different things can go wrong while you are driving.
In order to find the absolute best car insurance rates available, do your research and figure out which plan is right for you. If you have never been in an accident and feel confident that your safe driving record will continue, you can probably go with a higher deductible, which will save you money on your car insurance short term. If you are not as confident in your driving, however, it is probably best that you pay a higher premium because it could save you money in the long run.
Do your research and find car insurance rates that you can not only afford, but that will also properly protect you. There is nothing worse than getting into a car accident, but if you have efficient car insurance, you can be confident that everything will be taken care of for you.