If you had no idea about what an excess over claim is, here is a complete discussion on this important aspect of an insurance plan. In general, an
Damage Excess defines the contributions made by a policyholder in making a claim. Let us understand with the help of an example:
Assuming that you choose an
Accidental Damage Excess of £100, in case you ask for insurance cover of £500, then you will be required to contribute £100 and remaining £400 will be paid by the insurance company. However, if the damage demands the expenditure of money below £100, then there is no point in your insurer and you may utilize your excess for covering the damage.
Here are few types of excess you must know:
- Compulsory Excess: It is the fixed amount an insurance company demands for, in case you forward a claim to it. This amount is fixed at the time you sign a deal with your insurer.
- Voluntary Excesses: It is a temporary facility offered by all major and small insurance companies. It is the amount, you may voluntarily accept to pay in case of claim put forward by you. This amount is added to your compulsory excess and the remaining amount is paid by your insurer.
The voluntary excess is capable of reducing down the amount paid by you as premium to the
Bike Insurance company. However, you must sit down and calculate all pros and cons of voluntary excess. You must be able to maintain balance between amount spent as voluntary excess and the amount saved by following this practice. You may refer to terms and conditions offered by your insurer to have a better knowledge of voluntary excess.
