Excess policy coverage leads to cheaper car insurance

Motorists in search of cheaper car insurance may be able to find it by taking out an excess cover policy.

The excess portion of a driver’s motor car insurance is the amount not covered by the insurer in the event of a claim.  By agreeing to pay more out of pocket in the event of an accident, a motorist’s overall car insurance rate will be cheaper.

Many insurers charge around £40 annually for a policy with a £500 excess.  Before taking out such a policy, motorists may need to examine the cost effectiveness of such a decision.

One price comparison site recently released the findings of a research study concerning how cost effective taking out excess cover can be.  The research showed that a 40 year old male from the Milton Keynes region would pay a premium of £319 on their Ford Focus if they agreed to a £500 excess on their policy.

However the same policy with no excess increases in price by just £35. In this case the driver in the example would be better served by paying slightly more to avoid having to pay up to £500 in repair costs if they made a claim on their insurance.

However younger drivers may find that adding excess cover is more beneficial. Cheap car insurance for young drivers is very hard to come by, so any substantial savings to be found may be worth the risk.

In the example given above the cost for a male Ford Focus owner from MK aged 18 with no excess on their policy would total £8,585.

If the 18 year old chose the £40 excess policy they could save as much as £260 overall.  As the cost of car insurance for younger drivers can be so dear, the potential savings of £260 could be very significant.

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