- What is an excess?
- Why would I choose a higher excess?
- Can I choose a nil excess?
We’re often asked about the excess on a high value home insurance policy. Here are answers to a few frequently asked questions.
What is an excess?
When you make a claim, whether it’s on the buildings or contents element of your policy, the insurer will make a deduction called an excess before paying out the amount you’ve claimed for.
Why would I choose a higher excess?
To put simply, a higher excess will yield a lower premium. This is usually via an insurer discount of a set percentage of the premium. On a lower premium, a £1000 excess may save £50 a year; on higher premiums it can save figures in the hundreds. This is money in the bank for you, the client, to put towards the claim if the time comes.
In some instances, a higher excess will pay for itself straight away in that the premium reduces by more than the voluntary excess. In most instances though, the saving will take a few years.
If you have never claimed, think about how much money you could save over these years by taking a higher excess. That’s money in the bank to put towards a claim, should one happen.
Insurers like higher excesses as it rules out the smaller claims, leaving the insurance for the big claims; the ones that really matter.
Can I choose a nil excess?
You cannot choose a nil excess. This is to protect the insurer from smaller claims, which in turn increase premiums, and to protect the client for the same reason.
Some high net worth insurers offer a nil excess on insurance for your jewellery and fine art, though you can opt for a compulsory excess which will help keep the premium down as explained above.
Why has my insurer imposed a higher excess?
This is often because a client has a poor claims history, or it could be that an insurer has deemed there to be a special risk, in which case they might impose an excess on a specific peril, for example, flood.
If you would like to know whether the excess on your insurance policy could be reduced, get in touch with us, we would happily review your policy.
What excess should I choose?
Most policies will have a standard minimum excess. A few mid and high net worth policies offer a £100 or £150 excess, but most mid-net worth policies start at a £250 excess, with some high net worth policies starting at a £500 standard excess.
If you need help choosing an excess, speak to Lark, or make an enquiry. We have the knowledge, understanding and experience. We will discuss your needs, look at your requirements and tailor a policy for you accordingly.