If you don’t know what an insurance excess fee is, then you are not alone! A number of people struggle to understand what a car insurance excess fee is – and that’s ok!
They don’t understand why they have to pay this and especially why they can’t get their hands on these funds if they were not to blame for an accident that resulted in an insurance claim!
Luckily, Oneplan (that’s us), believe in making insurance simple. And in being experts in insurance, we are here to explain exactly what an insurance excess is, why you have to pay it and answer the top questions our clients ask us.
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Here’s what a car insurance excess fee is:
An insurance excess fee is the amount YOU have to pay in the event of a loss. It is basically the uninsured portion of your loss. This means that when you submit a claim, you will have to pay this portion. Normally, when you get in a car accident, you will have to pay the excess to the panel beater or mechanic for fixing your car. Your car insurer (that’s us), pays the rest.
How an excess payment works:
An excess amount is agreed upon by you and your insurer. It is what you have to pay in when a claim is being settled.
Here’s an example: If the excess on your car is R4000 and you are involved in an accident and this costs R20 000 in repairs, then your insurer will pay in R16 000 and you will pay in R4000.
Pro tip: If you pay a higher excess, then this means your monthly premium will be lower which can save you money but means that you will have to pay in more in the event of an accident.
Why do I have to pay a car insurance excess fee even if the accident was not my fault?
The thing is – you will always have to pay excess for an accident – regardless of whose fault it was. This is because your insurer does not place blame as a criteria in determining whether you have to pay excess or not. It is important to know that the admin costs of a car insurance claim are the same, regardless of whose fault the accident was.
If it was NOT your fault, then you can still claim your insurance excess fee amount BACK from the guilty party. However, this can take a long time, especially if the guilty party does not have motor insurance.
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Here is an example of an insurance excess fee for a car accident: The best way to describe what an insurance excess is, is to describe it in a real-world scenario and by using some examples of questions and responses:
The scenario:
The owner of an insured vehicle has his car rear-ended by another driver when he was at a stop street – let’s call this guy Sam. The insured driver is not at fault (the one who was crashed into) – the other guy is at fault – let’s call him Bob. So, Sam was crashed into by Bob.
Here are the details:
- Bob’s vehicle is not insured
- Sam now has to pay an amount of excess to get his car repaired
1. So, who is responsible to claim the excess that has been paid from Sam? Will this process be communicated to Sam?
- Sam’s insurer (that’s us, Oneplan) has the right to make the full recovery back from Bob and also make this recovery in our name.
- This recovery of funds will also include the excess that Sam had to pay and this process will begin as soon as the claim is made.
- This info will be stated in Sam’s policy, but it will also be communicated to him from our team of staff.
- All communications need to be clear between Sam and us to make sure that Sam does not endanger his own claim by not telling us something.
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2. Will the insurer (Oneplan) claim on behalf of Sam?
- Yes, we will claim on behalf of Sam as part of our recovery claim process.
- But, we will decide if we want to make the recovery of the whole claim for reasons stated in Sam’s policy – we explain some of these reasons in the question below.
- If we do not claim the full amount on behalf of Sam for whatever reason, then Sam is free to do so on his own account, after being cleared to do so by us.
3. Are there instances when an excess may not be recovered?
Yes, there are certain instances when an excess cannot be recovered:
- Sam did not get Bob’s details
- Bob does not have any income or assets to his name
- The legal costs outweigh the recovery costs (excess amount)
- Bob cannot be traced
- The claim is not valid for whatever reason
4. If the insurance company does not claim the excess, can Sam do so on his own?
- Sam would first have to get consent from us and have his subrogation clause (legal right held by the insurance company to legally pursue a third party that caused an insurance loss to the insured) waived in his policy in order for him to claim the excess.
- This is often the case when we think that the basis and details of the claim are complicated and we do not believe that the amount recovered will be worth it as it may be a very small amount.
5. Will Sam’s monthly premiums go up after this accident?
- This will depend on the details of the accident and claim.
- We will look at a number of factors which include Sam’s driving history, accidents he has been involved in in the past etc.
The thing is – accidents do happen and the best thing is to be prepared for when they do with an insurance company that makes insurance simple.
Here’s what makes Oneplan Car and Household Insurance just a little better than the rest:
- Flexible cover you can adjust when you need to
- Paperless claims
- No vehicle inspections to sign up
Your Insurance Family,
Oneplan
