Lifestyle Excess Protect Worked Example
Lifestyle Excess Protection - The Figures
How It Works
A Husband & Wife (both 48) insure a 2015 Volkswagen Jetta on a fully comprehensive basis with a standard excess of £100, the annual premium is £587.94. If they add a £500 voluntary excess, then the premium reduces to £513.92. A saving of £74.02.
They then look at their home insurance and can get a price of £160.89 with a standard excess of £100. If they add a £200 voluntary excess, then premium reduces to £134.44, a saving of £26.45.
If he adds an extra voluntary excess of £500, then the price reduces to £2275.84, a saving of £198.24.
If he increases the voluntary excess to £1000, the price reduces further to £2107.84, a saving of £366.24.
This is all well and good, the only issue is if they have a fault accident, then they have a large excess to pay. This is where excess protect can help. If they take out a £1000 excess protect policy at a cost of £50, and then has an accident, then they can claim against the excess protect policy to recover the excess they have to pay. This saves them up to £316.24 depending on which policy they take out.
When claiming against the Excess Protect Policy, you can decide how much to claim (subject to the Maximum excess payable). So in this instance if you take out a £1000 Excess Protect Policy. As an example, you could make one claim for £1000, or two claims of £500 each. Once you've reached your limit, you cannot claim any further, although you can always just take out another policy.
Important Note
The only issue to be aware of when increasing your excess significantly, is that you cannot claim on the excess protection policy for claims less than the excess amount on the Car Insurance policy. So for example, if you went for a really large voluntary excess of £3000 and then had an accident where the cost of the claim was going to be £2500, then you could not claim on the policy as your excess is £3000 and you would have to pay for the damage yourself. This is the implication of going too large on the voluntary excess and should be considered carefully.
This quote was sourced from Moneysupermarket on 26/12/2018.
