We regularly use Facebook to promote our excess insurance and its always surprising to hear how many people think its too good to be true. You don’t need to take our word for it, trusted sources like confused.com and MoneySupermarket.com have written articles explaining the benefits.
Excess insurance is provided by a number of companies, including the main fully comp insurers. However, they don’t appear to like discussing or promoting it. Most likely because it only serves to highlight the unfair excess’s applied. A driver under 21 years old will probably be paying at least A?1,000 for their fully comp cover but if they ever needed to claim they will also have to stump up A?100’s in excess. Is that really comprehensive cover?
Auto insurance is big business and very competitive, over 70% of policies in the UK are purchased through comparison sites so they are always looking at ways to draw people to their site. The majority of people just want the cheapest premium possible and very rarely look into what they are getting for their money. One way to reduce premiums is to increase excess and our research showed that this tactic might be being applied by big insurers to make sure they are top of the comparison site lists. Again don’t take our word for it, a review by the Financial Conduct Authority highlighted concerns.
Comparison sites will argue that they just find the cheapest quote for you, they don’t write the policy terms & conditions or decide the prices. However, comparison sites have worked hard to establish themselves as trusted brands and should do more to point out the negatives and positives of the various quotes.
A major flaw in comprehensive insurance quoting appears to be that there is no limit placed on how much your excess can be compared to the value of the vehicle. We obtained quotes from four comparison sites for a 22 year old male with a 2007 1.4 Vauxhall Corsa worth A?2,000. All of them allowed quotes to be obtained from insurers with an excess amount of half of the vehicles value. One quote was A?1,034 with A?1,200 excess, meaning that the cost to repair or replace to vehicle would have to be at least A?1,200.01 for a claim to be paid out! Insurers will be quick to point out that the cost of the premium doesn’t just reflect how much it will cost them to repair your car or how much it costs to repair any third party damage you cause. The issue is that younger drivers are more likely to need to claim and insurance, like gambling is risk based.
When starting to learn how to drive, you should plan ahead and make you sure can afford to run a vehicle, comparethemarket.com conducted a survey which revealed that nearly 1 million motorists never drive after passing their test, with the cost of of driving a major reason.