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Getting the right amount of insurance excess when applying for auto insurance

By Jerry Subscribe to RSS | March 14th 2012 | Views:

When you are looking to get auto insurance, you may become confused about all the variables that you may need to consider. Some insurance companies may have lots of optional features that you can decide to use or not, which makes the whole process of finding the right insurance product that much harder. One of the things that you may have to seriously consider when you are getting auto insurance is the insurance excess. This is something that many people take for granted, but it is actually very important that you get the right kind of excess for you.

The role of auto insurance is very simple. Once you get involved in an accident, the insurance company is supposed to foot the bill for repairs of the car. This may seem very straightforward, but on deeper examination the issue may be a bit more complex than this. For instance, there are some insurance companies that will only foot a part of the bill, and others will take care of all the costs of repair. This means that for any new driver, the issue of auto insurance represents a minefield that may be difficult to navigate.

The issue of insurance excess does not do much to ease the complexity. In a nutshell, excess is the amount of money you would need to contribute towards fixing the damage. Most of the time, the insurance company will not release any funds unless you pay the excess first. This may seem a bit confusing, since the main role of auto insurance is to help you fix the car as has been mentioned above. However, insurance excess is still a very important tool, since it makes the insurance more affordable to many people.

When you go to apply for auto insurance, you will most often be given a chance to choose how much excess you should pay in case you are involved in an accident. In many cases, the higher the excess you choose the lower your cost of monthly premiums. This means that if you decide to take on a huge proportion of any costs, you will be required to pay very little in monthly premiums. This often tempts people to get the maximum excess they can find so that they do not have to pay much in terms of monthly premiums.

While this may be a great cost reduction strategy, it does have a few flaws. For starters, if you take on an amount of excess that you cannot afford, you may find yourself in dire straits when you are involved in an accident. In such cases, you would not be able to pay the excess, and this means that the insurance company will not be able to cover the rest of the cost of repair. This means that when you are considering excess, you should ideally try and get an amount you can afford. The best case scenario is to not get any excess at all, so that in case of an accident the company will pay for damage without any contribution on your part. However, this often means you would have to pay the highest premiums.

Jerry - About Author:
It would also be good to remind your social circle and family members with these tips on auto insurance excesses. After all, this is one area often neglected by people looking to get local auto insurance agents.

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