New research from Go.Compare Car Insurance has brought to light a significant gap in drivers’ understanding of key motor insurance terms, particularly concerning insurance excess. The study indicates that a considerable number of motorists are not fully grasping the nuances of their policies, which could lead to unexpected financial burdens when making a claim.
The comparison site’s findings reveal that a mere 39%* of those surveyed completely understand the meaning of ‘Compulsory Excess’, and an identical percentage (39%) comprehend ‘Voluntary Excess’. This means that alarmingly, six out of ten drivers are not entirely clear on their car insurance excesses. This lack of understanding could result in a financial shock should they need to file a claim.
Younger drivers, specifically those aged 16 to 24, demonstrate the least familiarity with these crucial insurance terms. Only 13% in this age group stated they fully understood both compulsory and voluntary excess. In contrast, older drivers aged 55 and over exhibited a stronger grasp, with 57% expressing confidence in their understanding of both types of excesses.
Car and home insurance policies typically incorporate both a compulsory and a voluntary excess. These amounts represent what the policyholder must pay when making a claim. The excess is either paid upfront or deducted from the claim settlement.
Compulsory excess is set by the insurer and is non-negotiable. Voluntary excess, on the other hand, is an amount chosen by the policyholder. Selecting a higher voluntary excess can often lead to a reduction in the insurance premium. However, it’s crucial for policyholders to ensure they can comfortably afford to pay this chosen voluntary excess should they need to make a claim.
Tom Banks, spokesperson for Go.Compare Car Insurance, commented on these concerning findings: “Excess remains a significantly misunderstood element of insurance, and this is worrying given the potential financial implications when a claim is made. While it’s understandable that no one wants to spend excessive time or money when arranging insurance, it’s essential to ensure you fully comprehend the terms and specifics of your policy.”
“The temptation to choose a policy with a higher compulsory or voluntary excess to lower premiums can be strong. However, it’s absolutely vital to confirm you can manage the excess you’re committing to pay,” Banks cautioned.
Excess isn’t the only area of confusion within insurance policies. A significant 71% of respondents admitted they did not fully understand the term ‘policy exclusion’, while 61% were unclear about ‘personal accident cover’.**
| Motor insurance term | % of people who don’t fully understand the meaning | |
|---|---|---|
| 1 | Policy exclusion | 71 |
| 2 | Additional excess | 69 |
| 3 | Legal assistance | 62 |
| 4 | Compulsory excess | 61 |
| 5 | Voluntary excess | 61 |
| 6 | Personal accident cover | 61 |
| 7 | Social, domestic and pleasure | 58 |
| 8 | Driving other cars | 58 |
| 9 | Protected no claims | 56 |
| 10 | Third party, Fire and Theft Cover | 54 |
Banks further emphasized, “Before finalizing any insurance purchase, thorough research and careful attention to the fine print are crucial. This includes understanding the limits of your policy cover, the excess amounts, and any exclusions that may apply.”
“We strongly advise using a price comparison website to evaluate policies side-by-side. This approach significantly aids in finding the right level of cover with excesses that are affordable should you need to make a claim.”
Drivers who purchase their car insurance through Go.Compare can take advantage of £250 free excess cover.*** This offer provides up to £250 refunded after a claim is settled, and applies to car insurance purchases only, excluding breakdown, windscreen, and glass repair/replacement. Discover more at: https://www.gocompare.com/free-excess-protection-cover/
For detailed information on excesses, please visit: https://www.gocompare.com/car-insurance/guide/excess-explained/
