Do all insurers have an excess fee when you claim or does this only apply for some?

Insurance is normally regarded as a distress product i.e. people buy it because they have to, and as such price seems to be the main reason rather than cover (The thing is - when you buy something like a loaf of bread you get the benefit quickly, so the quality of the bread is important - you won't buy mouldy bread would you? However most people don't perceive any benefit in an insurance policy so cover provided is not apparant - and many people buy the equivalent of a 'mouldy' insurance polciy believe me!)

Rant over - anyway to reduce the price of a policy insurance companies have got to reduce the amount that they pay out in claims. This means that they either reduce the 'cover' by excluding some benefits of the policy or they make the policyholder responsible for more of the damage themselves by increasing the excess - a good example is looking at 'aggregator websites' like moneysupermarket.com and looking at the cheapest policies there - so they pay out less in the event of a claim. As price is all that Direct companies can offer we are currently seing ever worse insurance contracts being released on the internet - all price orientated - Have a look at Quinn Direct and Easymoney for examples of cheap 'mouldy' insurance policies - and some companies are hiding the amount of the excess by making it very difficult to find.

Having an excess also reduces the number of small/ tricvial claims that take up a lot of resources to process and thus keep administration costs down.

So, generally, policies have excesses. You can often 'buy-back' the excess by paying an additional premium if you ask however if you do buy the excess back and then make several small claims the insurance company are within their rights to impose an additional excess at renewal date - this would come under 'special terms imposed' and could affect the ability to switch insurance companies.

One final point - suppose 10 people have a policy and the insurance company wants to offer the policy Â£10 cheaper and they know one person in 10 makes a claim. Then they will impose an excess of Â£100.00. This means that 9 people save only Â£10.00 but the unlucky person is Â£90.00 worse off!

They usually ask you when taking out insurance - most younger people take the full 'excess' to make their insurance cheaper.
The less excess the more the insurance premium will be.

Most insurance has an excess - home, motor, pet, travel to name a few. Those without - life, payment protection.
It would be made clear to you when taking out the insurance and would be in any documentation.

Higher excess fee will lower the premium. Meaning the insurer only pays the claim's amount after deducting the specified excess fee.

Most excess fees are stated upfront before you purchase the insurance and not during claims. Policy holders must understand the excess amount as stated in the policy document. (get an agent to explain the detail).

Insurers will apply excess in different product classes. Sometime for the same product class, the sub product class will have different excess amount. Like travel insurance, the overall excess fee may be 100, but for lost baggage can be 150.

Excess fee is applicable if the insurer feels that the product that they insured is subject to moral hazard (fraudulent claims) or high risk (too many claims' incident)

Hopefully the above info is helpful to u

it just makes your insurance cheeper. i personally have Â£0 excess but i pay a little more for that option with cis insurance

All insurers will apply excesses to their policies unless you pay extra for an excess waiver. There are usually sections of policies where the excess does not apply eg. windscreens, delayed luggage etc. Unfortunately to be sure what applies to each particular policy you will either have to have a member of staff explain it to you in detail or you will need to read the policy documents (tedious though they are)

No , but they charge more , the more the excess the less you have to pay for the insurance , ok if you are sure you won't have an accident that is your fault

You mean like a claims surcharge? It varies from state to state. It's the STATE that allows a claim surcharge, or denies a claim surcharge.

It ALSO depends on the type of policy - MOST states allow surcharges for at fault accidents on auto policies. And NONE allow surcharges for health insurance claims.

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