Increased insurance excess won't necessarily cut premiums, say experts

The scene where a van has crashed through the kitchen window of pensioner Annie Burrell's home outside Waringstown, in County Down.

Drivers are being warned that increasing the voluntary excess on their car insurance policy may not have a large effect on the price of their renewal premium. Insurers are being accused of ripping off motorists, allowing excesses of up to £1,000 to be selected without offering a corresponding price cut.

Research conducted by insurance comparison website found that increasing the voluntary excess from £250 to £1,000 only shaved an average £12 off the cost of the policy.

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Many drivers assume that opting for a higher excess results in a cheaper quote, with 16 million each year selecting an excess of between £250 and £1,000 – meaning they are taking on up to £750 extra liability for savings as insignificant as £1 a month.

uSwitch estimates that, with one in 10 drivers making an insurance claim each year, up to 1.6 million people could be left significantly out of pocket.

The research found the average annual car insurance policy with no voluntary excess costs £368, falling to £330 if the excess is increased to £250.

The cost of a policy with a £500 excess dropped to £318, a saving of just £12, while increasing the excess to £1,000 resulted in no further savings.

Rod Jones, insurance expert at said: "Drivers should ask themselves if the additional risk is worth the saving and would they be put off making a claim knowing they would have to pay a significant sum for doing so?

"With so many people making a car insurance claim each year, we urge those looking to renew or switch their cover to think seriously about the level of risk they want to take financially before they commit to a new annual policy."

Insurers responded, saying that higher excesses may not offer bigger savings as they only apply to damage claims made by the policy holder. The largest payouts are made for third-party bodily injury claims, where excesses do not apply.

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