Car Insurance Excess

Car insurance excess is the initial amount that you have to pay when you claim for damage. It is a kind of fee that insurance company charges to you to process your claim for damage. If your policy has an excess of $50, you will have to pay this amount initially before your claim is processed by the insurance company. Every time you file a claim, you have to pay this amount. It is normally paid to the garage where you repair the car. You are bound to pay the excess regardless of the fact whether you were at fault or not in the accident that caused damage to your car. You can get this incorporated in a short term insurance as well that you take when you hire a car on rental and travel some destination for a brief period.

The provision for this excess is sometimes compulsory by some companies and voluntary by others in Australia. Naturally, the premium charged in the latter case is higher. The amount of compulsory excess charged by a company is fixed based on the type of the car, age of the car and the driver. You can choose to increase the excess amount over and above what is required compulsorily by the company, and this can reduce your premium amount. As you increase the amount of voluntary excess, your insurance premium goes down because of the decreased financial risk to the insurance company in the event of an accident and subsequent claim by the policy holder. If the car that has to be insured is expensive to repair or if you are a young driver, some companies will charge higher compulsory excess and will most likely not offer any discount. Agreeing to the right amount of excess can help you get a good discount on your premium.