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The complete Guide to Excess Insurance

What is excess insurance and why do you need it? This post answers all of your questions about the cover and benefits of excess insurance for all drivers.

What is Excess Insurance?

 
Excess insurance is sometimes also called an excess reimbursement policy.
 
When you insure your vehicle, as you are legally required to, your motor insurance policy will cover your car for various things, such as if your car is stolen or you get into an accident and repairs need to be carried out. The exact benefits of your motor insurance will vary, depending on the type of insurance you have. What all motor insurance policies have in common is that they have an excess, sometimes known as a deductible, that the policyholder must pay if they make a claim. Then the insurance company will cover the rest of the costs, above the excess amount.
 
The amount of excess that each driver has to pay if they claim on their motor insurance policy can vary; it will depend on:
 
  1. The amount of compulsory excess applied by your insurer
  2. The amount of voluntary excess you choose when you take out the policy 
 
If you have a compulsory excess of €250 and a voluntary excess of €250, your excess will be €500. This means that if you make a claim on your motor insurance, you will have to pay the first €500 of the claim, and your insurance will only pay out the amount above that.
 
Excess Insurance is a separate policy to your motor insurance and means that you can claim back the excess amount (up to a specified limit) and therefore you are not left out of pocket if you need to make a motor insurance claim.
 

Compulsory and voluntary excess explained

 
Compulsory excess
 
The amount of compulsory excess on your motor insurance policy is decided on by your insurer and you cannot change this. They will base the amount of compulsory excess on a few different factors, which may include:
 
  • Your Age
  • Your driving experience / how many years you have been driving
  • The car you drive / engine size
  • Any previous claims you have made
 
Voluntary excess
 
The amount of voluntary excess on your motor insurance policy can be set by you when you take the policy out. If you choose a low voluntary excess, your motor insurance premium may be higher and if you choose a higher voluntary excess, your premium may come down. Some people choose to remove the voluntary excess completely from their policy, but it does usually result in a higher premium.
 

Do you still have to pay an insurance excess on your motor insurance if the accident or damage isn’t your fault?

 
You usually have to pay the motor insurance excess at the point you make a claim. If you are claiming for an accident or damage caused by another driver, your insurance company may be able to reclaim the excess from the other driver’s insurance and pay you back at some stage. However, if the liability for the incident can’t be proven, or if the other driver can’t be found or was uninsured, you are unlikely to get the excess payment back at all.
 

Isn’t excess insurance just for hire cars?

 
Often, short-term hire cars have a very high compulsory excess, which is set by the company that hires out the vehicle. Excess insurance is common in these situations, but many people are not aware that they can purchase an excess insurance policy for their own privately-owned vehicle or a car they are leasing long-term too.
 
Taking out excess insurance on a privately-owned or long-term leased car means that the driver is protected from paying the excess if they need to make a claim on their motor insurance policy.
 

Who would benefit from excess insurance?

 
Any driver with an excess on their motor insurance policy could potentially benefit from excess insurance. Whether there is a compulsory excess, a voluntary excess or a combination of both, this amount of money needs to be paid when you make a claim. With an excess insurance policy, you can claim this excess payment back, meaning that you’re not left with a big gap in your finances that could delay you getting back on the road.
 
It’s worth noting that excess insurance is usually only valid for one claim for each annual policy, up to the amount limit in your specific level of cover.

Excess Insurance is a separate policy to your motor insurance and means that you can claim back the excess amount (up to a specified limit) and therefore you are not left out of pocket if you need to make a motor insurance claim.

 

Can young or new drivers get excess insurance?

 
Younger or less experienced drivers often find that when they come to take out motor insurance, the compulsory excess set by their insurer is high. This is because the insurer has decided that this driver may have a higher risk of making a claim.
 
An excess insurance policy can be taken out by young or inexperienced drivers to ensure that they aren’t left out of pocket if they do need to make a claim on their motor insurance. They can reclaim the excess amount, up to their policy limit, which can help them get back on the road quickly.
 

Does excess insurance cover compulsory and voluntary excess amounts?

 
Excess insurance can include cover for both the compulsory excess and voluntary excess amounts on your motor insurance policy, as long as the combined figure doesn’t exceed the maximum sum in the level of excess insurance cover that you choose.
 
For example, a compulsory excess of €200 and a voluntary excess of €300 would mean that you require excess insurance with a claim limit of at least €500.
 

Why does excess insurance sometimes have different levels of cover?

 
Excess insurance usually has different levels of cover because the amount of excess that people have to pay when they make a claim on their motor insurance policy can vary. There is no point paying for excess insurance for an amount significantly higher than you need, so different levels of cover are offered to give you the flexibility to choose only what you need.
 
Excess insurance from PSA Insurance Solutions offers three different levels of cover. These are:
 
  • Bronze – covering a motor insurance excess of up to €500
  • Silver – covering a motor insurance excess of up to €750
  • Gold – covering a motor insurance excess of up to €1,000
 

If the excess payment is less than the excess insurance cover amount, can the whole cover amount be claimed?

 
The cover only includes the excess amount due for your specific motor insurance policy when you make a claim. Therefore, it can only include the amount charged by your motor insurer and will not include any amount above this.
 
If you want to know more about PSA’s Excess Insurance, click on the button below
 
 
 
 

Find out more details about PSA's Excess Insurance

 
 
 
 
 
 

Find out more about PSA's Excess Insurance

 
 
© PSA Insurance Solutions
PSA Insurance Solutions Ltd Reg No: C83206 is a limited liability company under Maltese Law, having its registered address at: MIB building 53 Abate Rigord Street Ta’ Xbiex Malta, Tel + 356 22 58 34 92. The company is enrolled to act as an insurance agent in terms of the Insurance Intermediaries Act, 2006 by the Malta Financial Services Authority (MFSA), Notabile Road, Attard BKR 3000, Malta.
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