Home owners are often caught out after making a claim on their home insurance as they find to their shock that they have to first contribute a certain amount before the insurer sorts out the rest.
What is the ‘excess’?
Many people take out cover without realising that, in nearly all cases, you have to pay what’s known as the ‘excess’ on any claim you make. This is the first part of any claim which the insured (i.e. you!) is expected to cover.
Most policies have a fixed excess, usually £50 to £100, but you’re usually offered the choice of voluntarily increasing this figure to upwards of £500 (sometimes more, sometimes less, depending on the insurer). This is known as ‘voluntary excess’ and can have the effect of decreasing your premiums as the cost-risk to the insurer is reduced.
If you are claiming for damage to a garden wall, for example, after a storm and the insurer estimates repairs will cost £1,000, but you have chosen a voluntary excess on your policy of £400, then the insurer will only contribute £600.
Is the excess the same for all claims?
However, it can get even more shocking for those who aren’t prepared; buried in the small print of most policies, you’ll find that the excess is greater for certain types of claims which often cost the insurer a lot of money, or are extremely common and therefore more likely to be claimed for.
So what types of claims might you expect to have to pay even more than the fixed or voluntary excess?
- Valuable items
With particularly valuable items, which you’re expected to specify that you own when you first take out your cover, the excess you have to pay is often higher than for claims involving more standard possessions.
So if your standard excess is £50, but you own an extremely valuable antique vase which is knocked over during a party, and you make a claim for £3,000, you might be expected to cover the first £250. It would possibly be classed as a ‘valuable’ for insurance purposes and the excess for valuables on your policy could be set at £250.
- Accidental damage excess
Most standard policies only offer cover for accidental damage caused by you, your family and others named on the policy (including, on occasion, pets!) as an optional extra. However, some of the better policies offer it as standard. Either way, the excess you’re expected to pay if accidental damage is the cause of your claim can be higher than for a ‘normal’ claim.
The difference might only be £100 or so, but be prepared.
- Escape of water excess
Water leaking and causing damage within a home (known as ‘escape of water’ for insurance purposes) is extremely common. It may be from burst pipes in the winter, or an overflowing bath, leading to damage to floors, ceilings and possessions. For this reason, many insurers fix an excess for accidental damage which is typically £200 to £300 greater than for the majority of claims.
- Subsidence excess
Subsidence is every homeowner’s nightmare as it usually involves the foundations of a home shifting, causing structural damage as a house moves and sinks into the ground. The resulting damage can be very hard to fix and often extremely costly and ongoing. Luckily subsidence isn’t a very common occurrence.
However, insurers would have to put up everyone’s premiums considerably if the excess for subsidence claims was the same as the ‘ordinary’ level of policy excess. So claims involving subsidence usually involve a much higher excess, typically £1,000 or more.
- Flooding excess
Flooding is often a recurrent problem in some homes; if it’s happened once, the chances are you’re living in a flood plain where it’s going to happen again.
Insurers often link the excess for flood claims to the likelihood of flooding happening in the first place and how many times you might have claimed for it before.
For first-time flooding the excess is often in the region of £500 to £1,000. If it’s happened multiple times, unfortunately you might find the excess payable runs into thousands of pounds.
We carefully select the insurers on our panel for their cover levels, price and claims service; to make sure you get the best possible quality for less. What you see is what you get – no hidden excesses or excessive fees. To speak to one of our experts, call 0203 014 9300 or email firstname.lastname@example.org