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Know Your Policy – Part 8; Your Motor Excess

By Kayser Baird | Durban | April 30, 2015

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

~Kayser Baird Insurance

 

 

 

 

 

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;

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?

There are different types of motor vehicle excesses

Different insurers have different standard excesses, and your average policy will 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 (common amongst direct insurers)

It is important to discuss your particular needs with your independent broker, 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, but this is often not worthwhile, particularly if your policy has a flat rand-based excess rather than a percentage based excess. 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.

Kayser Baird offers both Personal and Business short term insurance and is a leading South African broker. To request a quote for your personal insurance please contact us.

Read previous posts in the “Know Your Policy” series;

Part 1 – The Average Clause
Part 2 – All Risks Cover
Part 3 – Residential Buildings Insurance
Part 4 – Your Policy Excess Structure
Part 5 – Convenience Benefits
Part 6 – Load shedding and your personal policy
Part 7 –  Optional extensions on your personal policy

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