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The amount that a policyholder is required to pay when filing a claim against their car insurance policy is known as the car insurance excess. The amount of the excess to be paid at the time of filing a claim is determined by carefully reading your policy conditions. The excess or deductible on your auto insurance is pre-specified in your policy paperwork and cannot be adjusted later.

Car Insurance Excess

The sum that you pay as the vehicle insurance excess when you file a claim is covered by car excess protection, also known as car excess insurance, a specialty coverage provided by some auto insurance companies. The coverage sum is determined at the beginning when you submit a claim and is typically enough to pay both the voluntary and the mandatory excess.

Only after purchasing a vehicle insurance plan can you choose a car excess insurance cover. The whole amount you spent as a vehicle insurance excess may be refunded to you if you have car excess insurance. However, the premium you paid for your excess protection cover will become an unnecessary cost if you never need to claim on your auto insurance policy.

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There are two types of car insurance excess: mandatory and voluntary. The main distinctions between them are given below:

Compulsory Car Insurance Excess

The insurance company determines what constitutes mandatory or compulsory car insurance excess, which must be paid following the established rules. There is no room for bargaining because the policyholder does not influence the necessary vehicle insurance excess in this form of excess. Here, the insurance companies determine the obligatory or compulsory excess amount after taking into account several variables, including the policyholder's age, driving history, claim history, etc.

Voluntary Car Insurance Excess

As implied by the name, the optional vehicle insurance excess amount is decided by the policyholders. When purchasing your auto insurance, you may decide how much of a voluntary excess you wish to pay. AED 0 may alternatively be selected as voluntary excess. The optional excess is often offered in a range by insurance firms, and policyholders are free to choose any amount from this range.

It's important to note that certain companies may also apply additional auto insurance excesses. Some examples are age excess, driving history excess, nameless drivers excess, and others. Such auto insurance excesses are not typical, and you won't always find them with every company. Before finalizing the plan, you should carefully check the policy terms to determine if there are any provisions for further excesses.

When Are You Supposed to Pay Excess?

Theoretically, if you file a claim against any benefit of your comprehensive vehicle insurance plan, you must pay the car insurance excess. Therefore, you will be forced to pay the excess if your insurance company is responsible for paying your damage repair costs in a certain circumstance. The following situations require you to pay any applicable auto insurance excess under your plan:

Damages Caused by Your Fault in a Car Accident

Your comprehensive coverage would kick in to pay the damage repair costs if you were at fault in a traffic collision. In this case, all applicable deductibles or excess are your responsibility to pay.

Untraceable Damages Caused in a Road Accident by a Third-Party at Fault

Imagine that you were a victim of a car accident when the other driver was at fault. However, you are unable to provide the third-party driver's name, residence, or car number. Since the at-fault person cannot be located, your insurance company will be responsible for paying for the costs of repairing any damage to your car. In this case, you will also be responsible for paying the relevant excess.

Any Damages Not Covered by a Third-Party Individual or Insurance 

Whether it is theft or damage, your insurance company will pay any charges that cannot be paid by a third-party insurance provider. Therefore, in situations involving the theft of auto parts, the theft of the vehicle itself, accident damage, etc., you are responsible for paying the necessary excess.

Are You Able to Modify Your Compulsory Excess?

When you purchase the plan, you are free to select the voluntary excess amount. You may even choose various voluntary excess amounts to see how they affect your premium cost. However, after purchasing the plan and while filing a vehicle insurance claim, you are unable to adjust the final optional excess amount.

How Do Car Insurance Excess Premium Rates Affect Prices?

The premium rates for your car insurance plans are mostly unaffected by mandatory excess amounts because they are set based on your risk profile and are non-negotiable. Voluntary excess, however, has the potential to alter the cost of your auto insurance.

As taking on a greater deductible amount may suggest that the policyholder is less likely to file claims, higher voluntary excess results in cheaper rates. It could also imply that the policyholder feels at ease behind the wheel. Higher voluntary deductibles result in cheaper rates since they reduce the risk that the insurance provider assumes when accepting a policyholder.

How Much Should You Pay in Voluntary Car Insurance Excess?

Your ability to pay should be a deciding factor in how much voluntary excess you choose to accept in the event that you need to make a claim. Selecting a large excess amount that you are unable to pay after submitting a claim request might lead to a number of issues and financial hardships. As a result, it is wise to plan your budget and determine how much money you can set aside for repairs in the event that your automobile sustains significant damage.

As specified before, choosing voluntary deductibles can reduce your premium rates. You shouldn't let this fact, though, impair your judgement. Avoid picking a large voluntary deductible only to earn reduced rates since this might have the opposite effect when you need to file a claim. Choose the right car insurance in Dubai from the best insurance companies in Dubai to be clear about all the terms and conditions related to it!