New research from Go Compare has revealed that six in ten drivers are at risk of costly payouts because of not understanding how compulsory and voluntary excess work in their car insurance policies.
The comparison site revealed that just 39% of survey respondents said they fully understood the meaning of ‘Compulsory excess’ and the same amount said they understood ‘Voluntary excess’ This leaves a worrying 6 in 10 who didn’t fully understand what these terms mean.
Drivers in the age bracket 16 to 24 were the least clued-up with only 13% of them understanding the excess terms of their car insurance policies.
What is an Insurance Excess?
An insurance excess is the amount a policyholder agrees to pay towards a claim before the insurance company covers the rest. It’s a fundamental component of most insurance policies, yet it remains a source of confusion for many.
The cost of misunderstanding
This lack of understanding can lead to significant financial surprises. For instance:
- 43% of respondents were unaware that they might need to pay an excess for each claim on their policy.
- Nearly half of the individuals surveyed didn’t realise they could be liable for multiple excesses on a single claim.
- These misconceptions can result in unexpected out-of-pocket expenses when filing a claim, potentially causing financial strain.
Education is key
The survey shows the need for better consumer education in the insurance sector. Insurance providers and regulatory bodies should consider using simpler policy language and show examples of how policy excesses work.
Understand Car Insurance with the Bateman Group
As independent insurance brokers, it’s essential to us that our customers understand their insurance policies. When you choose us to find your car insurance policy, we’re always ready to offer support and answer any questions you might have.
Speak to our team by calling 01926 495113 or use our contact form to get in touch.
