Motorhome insurance: All things in excess
Words by Richard Dredge
Here we explain the reasons insurance excesses exist, the different types of excess payments and how you should weigh up your options compared to the risk.
- Why excesses exist
- Voluntary excess
- Other excesses
- Weighing up the risk
- Motorhome Protect Insurance Specialist
Why excesses exist
Time is money, with one of the biggest overheads for many companies being staffing. It’s why so many processes are now automated; if you can get your customers to do as much of the work as possible for you, it saves paying someone to do it. But what if you can just stop dealing with your customers altogether, for some processes? That’s what excesses are all about; a way of preventing people from making trivial insurance claims and clogging up the system.
Could you imagine how chaotic things would be if you could file an insurance claim for a broken door mirror glass or a 2cm scratch on your front wing? The system would grind to a halt from all of the additional paperwork, while insurers would be bankrupted by all of the extra payouts that they’d be liable for. That’s why insurance companies have excesses – to put the ball in your court when it comes to sorting out the costs of fixing any minor damage to your motorhome.
All motorhome insurance policies come with a compulsory excess, which is the minimum contribution that you have to make in the event of a claim, as set down by the insurer. On top of this you can opt for a voluntary excess, which can significantly increase your financial liability in the event of a claim, in return for a lower premium. Opting for a large voluntary excess can seem very appealing but, if things go wrong, you can end up regretting it.
It’s usually young car drivers stung by the horrendous cost of taking out cover for the first time who opt for extra-large excesses; motorhome owners are usually older, wealthier, less likely to make a claim and, therefore, likely to be paying a relatively small premium in the first place. But it’s still easy to fall into the trap of assuming that it won’t happen to you.
A typical motorhome insurance policy excess is £200 to £400 for overall claims, but there’s a multitude of other excesses that are included within your cover. You can also expect to see an excess in the event of making a claim specifically for misfuelling (£100 to £200 is typical), a damaged windscreen (normally £50 to £100) and personal belongings (£100 to £300).
Hire a motorhome and the excess can be a lot higher – as much as £2,500. As a result, some hire companies insist on you taking out separate insurance that pays your excess if things should go wrong; you can take out this type of cover for your own motorhome, if necessary, not just for one that you’ve hired.
What’s interesting is the massive disparity in the level of the excesses that are out there. It would be easy to assume that the greater the compulsory excesses the lower the premium, but it’s not that simple, because some of the best and cheapest policies come with some of the smallest excesses.
This is why, when you’re next renewing your insurance, you need to home in on this aspect of the policy, because if you buy badly and you then have to make a claim, you could be much worse off. But, while you’ll ultimately be worse off by choosing the wrong cover, at least you’ll be able to settle the claim. With car insurance, some companies insist that you send them a cheque to cover your excess, before they’ll make a settlement with you. Inflate your excess to cut the premium and you could be left high and dry if, in the event of a claim, you can’t afford to cough up.
Weighing up the risk
With motorhome insurance, things tend to work differently, as your excess will simply be deducted from the value of the claim. But, ultimately, you’ll still be left with a smaller payout if your excess is inflated, so weigh up just how much risk you want to take yourself. Because, after all, that’s what insurance is all about – gambling on your part as well as your insurer’s.
Andrew Evanson, of Motorhome Protect, comments, “Always pay attention to your excess levels, as you don’t want to be caught out should you make a claim. Excess amounts can vary greatly from insurer to insurer and are affected by certain factors such as your age, driving experience, vehicle type and value. In addition, excesses can vary depending on what type of claim you are making – accidental damage, theft, vandalism or windscreen – so make sure you have checked them all before purchasing a policy. If you feel the excess levels quoted are too high, then ask what other prices you can get based on lower excesses – the difference may not be that great.”
Motorhome Protect Insurance Specialist
In association with Motorhome Protect Insurance Specialist
Tel: 01865 818331
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