Car Insurance Basics

How To Escape The Excess Trap


November 12, 2014

A motor insurance company usually takes a huge risk when it decides to cover your from accidental damage. You pay you premiums and the insurance company says that if your car is involved in an accident, a fire, or is stolen, it will compensate you. So, what is there to protect the insurance company from people who want to take advantage of the cover for their own reasons? It a little something called excess.

What is excess?

In insurance terms, excess is an amount of money that you are required to pay by the insurance company if you are involved in an accident and you need the company to repair your car. This is usually stated when you are applying for your policy. In Kenya, the excess charged by most car insurance companies is 2.5% of the value of the car. Auto insurance companies also have a minimum value of excess. This means that the insurance company pays you less their set minimum (Say Kshs 15,000), or 2.5% of the value of the car, whichever is higher.

Excess serves to instil discipline and care while on the road. While the insurance company will pay all valid claims arising from an accident involving your car, you will also be required to part with some money to meet the costs of repair. This measure deters drivers from carelessness on the road and protects motor insurance companies from frivolous claims.

Avoiding Excess Tip #1: No Blame No Excess

There are two ways one can avoid paying excess in the event you must make a claim. First, if your motor insurance company has a “no blame no excess” policy, it means that you will be exempted from paying excess if you are not to blame for an accident. This policy provision ensures that a policyholder is not blamed for something that was beyond their control.  A note from a traffic policeman indicating that you are not to blame is all that you need.

Avoiding Excess Tip #2: Excess Protector

The second option is to pay for an extra cover called excess protector. An excess protector is an insurance cover that protects you from excess requirements in the event of an accident. This is how it works. Motor insurance companies collect excess from their clients whenever there are claims in their policies. If they collect an excess protector from the some of their clients, it is possible for them to pay the excess on behalf of the client. This makes it profitable for them to issue excess protector policies. The cost of including an excess protector in your policy is minimal compared to the value you would spend on excess.

It is more reasonable to pay the excess protector, than to keep the value of the excess in an account for a rainy day. Chances are, getting the money to pay the excess after an accident will only add to your misery after an accident. To find out how much it would cost you to have an excess protector policy added to your regular cover, feel free to fill our free online quote form. 


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