Drivers stung by insurance policy excesses rising above inflation

The average cost of compulsory car insurance excesses has risen well above the rate of inflation since 2012, new research has found.

Depending on the policy, the average driver could be facing a compulsory excess of up to £3,000 for a fire, theft or accidental damage claim – compared to a maximum of £475 back in 2012.

Average excesses for accidental damage claims have risen by 26 per cent since 2012 – going from £132 to £166 – while average theft excesses have increased by 25 per cent and fire-related claim excesses have gone up by 24 per cent.

The data came from the comparison of 232 comprehensive motor insurance policies from 2012, and 355 like-for-like insurance policies from 2019.

Lee Griffin, CEO, and founder of price comparison site GoCompare, the company behind the research, said: "Policy excesses are a hidden cost for drivers and they have gone up significantly in recent years.

"There's also a massive difference in the cost of excesses between insurers. So, when arranging cover, it is essential you compare excess levels rather than just focusing on premiums. And in case the worst happens, check you can afford the excess you're committing to.

"Some drivers agree to pay a higher amount towards the cost of a claim in return for a lower premium. However, if these drivers make a claim, their voluntary excess is added to the insurer's compulsory excess – which can add up to a considerable sum."

Compulsory excesses have risen considerably too, going from between £50 to £475 in 2012, up to between £50 and £3,000 in 2019.

Yet despite the increase, just 35 per cent of a survey of 2,000 British drivers checked policy excess levels when organising insurance, and 45 per cent actually knew the amount of their compulsory excess when questioned.