Motor Vehicle Excesses enable the consumer to share in some of the risk with the insurer and thereby lower the premium.

What does your motor vehicle excess really mean?

There are a number of common misconceptions about motor excesses and the way they are treated under different types of motor claims. The most common of these is that consumers often believe they won’t have to pay an excess if somebody else causes an accident. Both drivers would be responsible for the excess under their own policy, however if one insurance company recovers money from the other insurer, then their client would be refunded their excess.

In some instances, the driver at fault may not have insurance, or he may deny being at fault when approached by his insurer. In both instances there may be no recovery, and therefore no refund of excess. Even when recoveries are made, they can take months or even years.

It is important to understand that your insurance company does not have a duty to recover money from a third party that causes damage to your vehicle and there are a number of factors that have to be considered before money is spent on the legal costs to make a recovery, such as: 

• Does the other party have insurance?
• Does the other party have the means to repay the damages themselves?
• Can it be proven that the other party caused the accident, will the other party dispute that they were at fault?

Different types of motor vehicle excesses

Different insurers have different standard excesses, and your average policy may have more than one excess applicable to motor vehicles. Most insurance companies will charge the basic excess plus an additional excess for certain conditions including: 

• Drivers under the age of 25
• Drivers that have had their licence for less than 2 years
• Additional Excess for theft and hijacking (often waivered if tracking device is fitted)
• Time of accident excess for accidents that occur between midnight and 5am 

It is important to discuss your particular needs with your underwriter, to ensure that your policy is placed with an insurer that has an excess structure that fits your needs.

Waiver of Basic Excess

You can elect to pay an additional premium to waiver the basic excess on your policy.  Motor Vehicle Excesses enable the consumer to share in some of the risk with the insurer and thereby lower the premium.

If you have a tracking device fitted to your vehicle, your additional theft and hijacking excess will often be automatically waivered and in addition your premium will be discounted so it is highly recommended that you have an active tracking device fitted to your vehicle.