Insuring your van can be an expensive affair, and weighing up whether having a higher excess is worth the discount in premium can be hard.
But an emerging product designed to insure your excess could make that decision a lot easier.
Save on the upfront cost
It’s a fairly complex type of cover, but it essentially means you can enjoy a saving on the overall upfront cost of your insurance policy by having a higher excess, leaving you safe in the knowledge that you’ll be reimbursed for any excess you’re required to pay if you have an accident that's your fault.
To get a better idea about how excess cover works and how it can save you money, take a look at the two tables below:
Scenario 1: Typical policy with an average voluntary excess amount and no excess cover product in place
| Excess: |
£250 |
| Premium: |
£800 |
| XS cover: |
£0 |
| Upfront cost: |
£800 |
Scenario 2: Policy with a higher voluntary excess and the excess cover product in place
| Excess: |
£500 |
| Premium: |
£700 |
| XS cover: |
£40 |
| Upfront cost: |
£740 |
These are just examples, but you can see how raising your excess and opting to cover it could mean you pay less on the upfront cost of your insurance.
When excess cover kicks in
So you’ve saved money on your premium, but what happens down the line if you need to make a claim?
If the value of damage done to your van is more than your excess, you’re probably going to be making a claim on your insurance.
Even with excess cover in place it’s not advisable to claim for anything under your excess amount, as the negative effect on your renewal cost and future quotations could well be significant.
Whether you have excess cover or not, initially you will be required to pay your insurer the full amount, be it £250, £500, or however much you opted for when you bought the policy.
The difference comes after this, because with your excess cover policy you can claim back the full amount, making sure you’re not left out of pocket.
If paying a higher excess initially is going to be a problem for you whether you get it back or not, this may not be the ideal product for you.
Alex Higgs, head of van insurance at Confused.com, says: “Excess protection can be invaluable as it allows customers more flexibility in increasing their excess to reduce premiums. However, bear in mind it only pays out once the claim has been settled, so if the process takes a while you will not be reimbursed until the point of settlement.”
Excess cover is being offered by several insurers, and will be available on Confused.com in the near future. If you'd like to be notified when the cover is available on our website, send an e-mail with "van excess cover" in the subject line to druryp@confused.com and we'll let you know.
