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The bit that your insurer wants you to pay when there's been a claim can also be insured!

Did You Know That You Can Insure Your Policy Excess?

August 2017

It sort of doesn't make sense because the excess is meant to be there to ensure the policyholder feels some "pain" if a claim happens and will therefore try harder to prevent them. None the less it is available and if properly considered can be a useful protection. Generally excess waiver insurance has been something we only came across when we hired a car abroad and were asked for some extortionate additional cost when picking it up to avoid being stung for £300 plus if the car got scratched. Now though you can protect your own motor vehicle excess, your home insurance excesses, motor fleets can "buy" a pot of money to recover excesses through the year and with the advent of businesses finding flood cover difficult to obtain in some areas, some very high flood excesses can be protected, certainly up to £50,000 and probably more. Is it worth it or is it just another way of extorting premium from you?! As with most insurance covers that depends. It's always a question of weighing up your risk, the likelihood of something happening, its cost and your ability to meet that at the time of the loss against the certain outlay of the premium. So you can take your own risk or pay to lay it off to an insurer. With Flood cover if you can't get cover without a really chunky excess then spending maybe an additional £1300 to protect against the possibility of having to find £25,000 probably makes sense. Motor and other excesses are more dependent on personal choice. There is though another consideration. Perhaps you have a £250 excess on your motor fleet policy because that's what's been offered and are happy to pay any £250's yourself. What if you could get a discount from your insurer to increase that to £500 or more, then insure the excess for significantly less than the saving made? You have to bear in mind that most excess protection policies don't pay unless there has been a claim settled under the main policy so with a £500 excess there would have to have been a claim for at least £501 and realistically more so you are agreeing that you won't be able to get anything back for incidents costing less than the level chosen. With Flood Excess policies it doesn't necessarily work that way though and, depending on the policy, it may pay for a loss of say £5000 where there is a £25000 excess provided that a claim could have been made but for the existence of that flood excess.

It's definitely a consideration as part of a good insurance program and can give you cover from the ground up where it's not available otherwise, protect against a number of smaller losses that can add up over a year and/or save premium. If you ask us to quote for your business we'll certainly be raising it as a discussion point.