Can you afford your insurance excess?
Insurer AXA has warned drivers against pushing up levels of excess in order to reduce premiums as growing numbers struggle to meet payments.
The excess is the amount a policyholder will have to pay in the event of a claim and it can be anything from £50 upwards.
Over the past couple of years AXA has seen a growing number of customers unable to authorise repairs to their damaged cars due to lack of cash to pay for the excess. In 2011, this number climbed by 61% leaving people with potentially unroadworthy cars or at the very least with damage that will deteriorate due to lack of repair.
Research from the company shows that 29% of motorists do not have enough readily available savings to cover their excess if required. Nearly half the population (48%) has readily available savings of less than £500 and a third (34%) has less than £200.
Sarah Vaughan from AXA said: “As an industry we need to make sure motorists understand the level of excess they are committing themselves to when they buy their insurance and then to ensure it is at a sensible level for them. Around one in 10 will have an accident each year so there is a real likelihood that they will need to find the money at some point.
“We appreciate that premiums have risen a lot in the last couple of years and we can understand consumers looking at ways of saving a bit of money. But if this means that they can’t afford their excess, it is a completely false economy.”