Excess refers to a fixed amount that you have to pay if you make a Car Insurance claim. If, for example, your basic excess is R3 000 and the damages to your vehicle amount to R40 000, you will have to pay the first R3 000 and your insurance provider will pay the balance of the claim, i.e., the R37 000.
Paying an excess serves the following purpose:
Higher excess vs lower excess
When taking out an insurance policy, the excess payable will be stated on your policy documents. Most insurance providers have a compulsory excess that you’ll have to pay in the event of a claim. Always make sure that you familiarise yourself with your policy documents and that you know what your compulsory excess amount is.
You can also voluntarily select to increase your basic excess thereby lowering your monthly Car Insurance premium. A higher excess should lower your premium, but it’s important to estimate whether you’ll be able to afford the higher excess payment in the event that you’ll have to make a claim.
You can also decrease the basic excess payable, which would mean that you’ll pay less if you need to make a claim. Keep in mind, however, that your monthly Car Insurance premium will increase when you decrease the excess payable.
Shop around for Car Insurance quotes online with Hippo.co.za, and use the excess setting, to find the best deal for your budget.
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