When getting car insurance, everyone has to agree to some kind of deductible. That's just how the system works. Basically, it means that if you get into an accident and your car needs to be fixed, you will have to pay a certain amount toward the bill. If you caused the accident, you lose the money. If the accident wasn't your fault, the third party's insurance company will pay you back for the extra money you had to pay. If your car is totaled, your insurance company will take out your deductible and your excess.
When getting car insurance, everyone has to agree to some kind of deductible. That's just how the system works. Basically, it means that if you get into an accident and your car needs to be fixed, you will have to pay a certain amount toward the bill. If you caused the accident, you lose the money. If the accident wasn't your fault, the third party's insurance company will pay you back for the extra money you had to pay. If your car is totaled, your insurance company will take your deductible out of the settlement amount.
Things aren't always that simple, though. Unfortunately, some drivers on British roads don't have insurance. So, the question is, what happens to your claim if you get into an accident with an uninsured driver?
Section 143 of the Road Traffic Act of 1988 makes it clear that everyone who drives on UK roads must have insurance for the car they are driving. The point of insurance is to make sure that if you cause an accident that causes damage, you can pay for it with the money from your insurance policy. Some drivers don't bother with insurance, which is sad because it's against the law in the UK. As a result, they save themselves hundreds of pounds a year. Still, someone has to pay for these drivers, and the people who do have insurance are the ones who do.
The Department of Transport thinks that up to 5% of drivers do not have insurance on the car they are driving. Stats also show that drivers who don't have insurance are more likely to get into an accident. It's becoming more and more common, and it's hard to stop.
If you are not at fault in an accident and the other person is not insured, the Motor Insurers' Bureau will pay you back. Who pays for them? The business of car insurance! Some of the extra money you pay for your premiums goes there. You will also have to pay the agreed-upon excess yourself; no one will be able to give you that money back.
Here's what you need to know about the word "excess":
Mandatory Extra This is the minimum amount that the insurance company says you have to pay toward fixing the damage. This is agreed upon at the beginning and depends on your age and driving record. For example, you might only have to pay a minimum of GBP50 if you are over 25 and have never been in an accident. People with a less than perfect driving record or who haven't been driving for a long time could be asked to pay GBP500. Most drivers make about GBP100 a week.
Unwanted Extra This is the amount you are willing to pay over and above the minimum "required" amount set by the insurance company. This is a chance to lower your premiums, because if you agree to a high deductible, the insurance company knows it won't have to pay out as much if you need to make a claim. It's one of the few surefire ways to save a few pounds on car insurance, but some insurers may not give you the option.
The shop that fixed my car won't give it back to me until I give them a check for the extra amount. Does this usually happen?
This is normal, and you will have to pay and then get the money back from the third-party insurer. Always take a good look at the car to make sure that the repairs have been done well. You also need to keep the receipt to get your excess back from the insurance company. Just in case they dispute the charges, get a copy of the repair schedule so the insurance company can see exactly what work was done on your car.
