Insurance excess

Accident and legal support

What does insurance excess mean?

You agree to pay a fixed sum when you make a claim on your insurance policy. The insurance company will pay losses beyond that excess figure.

We tend to chose this option to reduce our insurance premium. Insurance companies like an excess as it puts you off claiming unless the sum involved is large. Excesses avoid small claims for broken lights and small dents. Excesses save the insurance company money and expensive office work.

So everyone one is happy, until a claim has to be made.

When an insurance claim has to be made you need to know the score. Most people’s first thought after an accident is to contact their own insurance company. Yes your insurance company must be informed, but you do not always need to make a claim. If you contact Your Key first we will deal with this notification for you.

Contacting Your Key first on 08000 114 114 is the best course because:
• Our independent experts will assess if someone else is to blame and claim the expense and loss from their insurance company, and not from yours.
• Claiming on your own policy, even when someone else is to blame, can ruin your claims history.
• If you claim on your own policy you will have to pay out the excess.
• Your own insurance company may not chase the party to blame for the money paid out.

You must understand the economics which sit behind this rather surprising position. Your insurance company is not your representative. It is an insurance company which has agreed to pay out in certain circumstances. Insurance companies like to keep admin costs to a minimum, so many do not like to chase other insurers for their outlay and your excess. This leaves you with an insurance black mark, and a hole in your pocket as you have paid your excess, even when an accident was not your fault.

All legal expenses insurance policies are based on the ability to have legal costs paid by the party at fault if the claim succeeds, and the legal expenses insurance picks up those legal costs if the claim goes wrong. If there is no chance of the legal costs being paid by the other side then the legal expenses insurance will not support your claim. Legal cover insures the risk of you losing your claim rather than paying your legal costs outright.

So when can you recover legal costs?

If there is no injury worth at least £1,000, and the financial loss is below £10,000 (£5,000 before April 2013 in England & Wales, £3,000 in Scotland,  and in Northern Ireland a road traffic case does not fall with the small claims jurisdiction) your case falls into what is called the small claims category, and your legal costs cannot be recovered from the party to blame.

Bringing a claim with professional help is the best way, but you must be able to recover your legal costs. If your injury is not worth £1,000 in compensation value, and the financial losses are worth less that £10,000 in England & Wales or £3,000 in Scotland and Northern Ireland (see above), your legal costs cannot be recovered.

If your injuries are worth more than £1,000, and the injury does not have to be too serious to be worth £1,000, then legal costs can be recovered from the party to blame if the claim for compensation is successful.

Always contact Your Key first.

The Your Key legal cover will help for any accident where an injury is suffered. We will help you recover compensation for the injury plus any financial losses, including your insurance excess.

We can suggest two alternatives where there is no injury or the injury is worth less than £1,000. and the financial losses are worth less than £10,000 in England & Wales or £3,000 in Scotland and Northern Ireland (for Northern Ireland please see above). Both mean someone else handles the case for you, and this is important as it is best if you have someone in your corner who know the ropes.

Our first suggestion is to use credit repair for your vehicle. The credit repair company we use will assess what happened in the accident. If someone else is to blame the credit repair company will collect and repair your vehicle and send the bill direct to the insurer of the person who caused the accident. All the work is done by the credit repair company, and they will even inform your own insurer, and there is no need for you to pay your excess.

The second option is credit hire. If you have been involved in an accident, your vehicle is out of action, and you have no reasonable alternative available, then a credit hire company will hire a vehicle to you. Just like a credit repair company the bill will be presented to the insurer of the person who caused the accident.

Both repair and hire can be carried out on credit, and within process your and expenses can be included.

Credit repair and credit hire have sometimes been given a bad name. Some credit companies have tended to allow hire to last too long, or to hire an unreasonably expensive vehicle. These problems have been overcome by agreements between the insurance and credit hire industries. Procedures and cost agreements are in place and for you that means a quick service and no need for you to pay anything, not even your excess.

Compare that to making a claim to your own insurance company when someone else is at fault. Yes your insurance company will sort out the repair, and might even arrange a courtesy vehicle, but you will pay out your excess. If your insurer does not chase the money it has paid out from the insurance company of the person to blame you are out of pocket, not once but twice. First you pay the excess, and because the insurer has paid out your claims record is damaged and your premium goes up. Not all insurance companies claim from other insurance companies, and even if they do they tend not to include your excess and expenses. That will not feel fair but it is a regular problem. The reason is that most people call their own insurer after an accident, and they do what you have paid them to do, they repair or pay for the value of your vehicle.

To avoid these problems you must get independent help and support, and that is exactly why Your Key exists. Armed with the right advice you can deal with your problems without unnecessary cost and anxiety. This is the time to talk to those who know the score, the time for independent accident advice and support from Your Key.

Please note that comments below dated before 2012 which refer to legal cover arrangements are now out of date.Please click herefor an explanation.