Research your car insurance options is best. The insurance you choose will also require you to pay an excess or a deductible, no matter what level of coverage you choose. Select a high quantity in exchange for lower monthly premiums. Still, you need to know your deductible and excess to pay more than expected for an unexpected vehicle repair. Fincrew Insurance has put together a guide to help you work out your deductible and excess for car insurance so you only accept a quote that suits your needs.
What’s a Car Insurance Deductible?
In a perfect world, businesses and their customers would always be able to interact honestly to provide quality services for everyone. Unfortunately, this is only sometimes the case in reality. Car insurance providers need to ensure that they put in place measures that discourage their customers from making false claims by putting measures that prevent them from doing so. There is little difference between your car insurance excess and your deductibles other than that an excess refers to the amount you’ve agreed – in advance – to pay if you make a claim. In contrast, a deductible only applies when you are in an accident.
What Is Excess In Car Insurance?
A policyholder’s excess is the amount they agree to pay when they buy the policy towards a claim. In Malaysia, it is similar to a deductible but more common. The amount of your car insurance excess is determined when you purchase your policy. Your only chance of changing it is if you file a claim. Having an idea of your excess can help you prepare for future claims without worrying about how much you can afford. For example, if you choose comprehensive car insurance with an RM4,000 excess and the damage to your vehicle costs RM6,500, you will have to pay RM4,000 of the excess, while your insurer will cover the remaining RM2,500.
Excess amounts vary depending on your risk profile and what you are comfortable paying. If you have limited driving experience or are a new driver, you are statistically at a higher risk, which increases your excess. How you drive your vehicle, where you live, how you use it, and the measures you have taken to prevent your car from being damaged or stolen can all have an impact. You can expect your excess to be lower if you have a tracking device and park it in a locked garage behind a locked gate than if you don’t have the device and park on the street.
There is also the possibility of being offered a percentage excess. You agree to pay a fixed percentage of the total claim cost. You usually have to pay a flat bunch if you get into an accident. Exchange a higher premium for a lower quantity in many cases. However, you should be aware that your premium may increase if the circumstances of your claim change.
How Does Car Insurance Deductible Work?
The amount of your deductible will vary depending on what type of policy you choose, but there are no annual deductibles in this policy. This cost will be your responsibility whenever you submit a claim to the insurance company. Upon payment of the deductible, your insurance company will pay the balance of the claim amount or the repair cost once you have paid your deductible. Here is an example of how a car insurance deductible works:
- There is a RM 5,000 deductible and RM 30,000 damage from covered accidental injury.
- In the case of an insurance claim, the insurance company might pay RM 25,000 to repair your car, but you are responsible for the remaining RM 5,000 out of your pocket to cover the remaining cost of repairs.
How Much Excess On Car Insurance Should I Pay?
If you are considering paying an excess, remember there is no right or wrong answer. Ultimately, it’s a matter of personal preference. Consider paying a lower monthly premium and spending more on an excess payment. Additionally, you might prefer to pay more every month so that your extra income is low enough to pay without any problems if necessary.
It would help if you remembered that honesty is the best policy for car insurance, including your excess. When dishonest with your insurance provider about who usually drives your car or other things, you may pay a higher quantity or have your claim denied.
