Is it time to renew your car insurance? Shopping around is always recommended so that you can enjoy maximum cover and a price that suits your budget.
But, one detail you have to pay attention to is the excess. This is something that most car insurance policies will have, but the amount will vary. Often, it’s you who gets to decide the excess amount.
So, how can you decide on the perfect excess for your budget? This guide can help you make a good decision.
The Goldilocks Dilemma Explained
You know the story of Goldilocks – not too hot, not too cold, just right. Well, our Goldilocks Dilemma is all about finding that sweet spot for your excess car insurance.
It’s the balance between not having too high an excess that leaves you scrambling for cash if you have an accident and not having it so low that your premiums skyrocket. Let’s explore how to hit that insurance sweet spot.
Impact On Premiums
Now, let’s get down to business. Your excess isn’t just a number; it’s a magic wand that can influence your insurance premiums. We’ll break down the seesaw effect – higher excess, lower premiums, and vice versa.
Having A High Excess
When you have a high excess, this means that you’ll have a larger bill to pay if you want to claim on your car insurance.
Therefore, if you get into an accident and need to repair your vehicle, you’ll have the excess to pay before the insurance policy takes over.
Generally, people love having lower premiums, which is often the consequence of a high excess. But, you also have to consider whether you’d be able to pay this excess if something went wrong.
Having A Low Excess
Now, let’s talk about choosing a low excess. This has the benefit of having a lower amount to pay in the instance of a claim.
This can be a huge relief if you’ve been in an accident and your car has been damaged badly, needing extensive repairs. But, in order to enjoy this benefit, it will mean that you have to pay higher premiums every month.
Assessing Your Budget
Time for some budget soul-searching. We’re talking about assessing your financial situation and figuring out what you can comfortably put on the excess table.
You need to decide on the figure you’d be comfortable paying if you had to. This means that if you want to make a claim, what sum could you put towards it that you wouldn’t struggle with financially?
Some people take a gamble and want to benefit from lower premiums in the long term. But, this can be a real headache later on if you’re not careful.
Sit down and really discover that you pay without getting yourself into debt. Add up all of your financial expenses and see what you can contribute without a lot of trouble.
Tips For Budget-Friendly Excess Choices
One thing’s for sure: everybody wants to secure a good deal when it comes to car insurance. Here are some tips that can help you make a budget-friendly choice.
Think About Your Claims History
Are you someone that makes a lot of claims on car insurance? If the answer is no, you could choose a higher excess.
This is because you’re less likely to need it. In contrast, if you have made a lot of claims in the past, you’ll benefit from a lower excess.
Know The Premiums
We’ve discussed that a perk of a higher excess is that you save money on your monthly premiums. But, you need to ensure that this is the case.
Every insurer is different, and you might discover that there are better savings when you adjust the premium amount. Ensure you explore this to get the best deal.
The Importance of Reviewing Regularly
Life changes, budgets change, and so should your excess. It’s important to revisit and adjust your excess to keep it in tune with your ever-evolving financial symphony.
So, if you find that you have more money to spare, you might want to lower your excess and pay more.
Alternatively, if you hit a rough financial patch, discuss with your insurer what you can do to make your situation easier. The last thing you want is to default on your payments.
Conclusion
There you have it, our journey through the Goldilocks Dilemma of car insurance excess. Remember, it’s not about fitting into someone else’s shoes; it’s about finding what fits your budget just right.
So, take a moment, assess your financial situation, and let’s make sure your car insurance excess is comfortable for you to pay and provides you with security.
