When you are taking out a new home insurance policy or renewing an existing policy, one of the most important factors to be aware of is the excess payable on that policy.
The excess is the amount of money you pay before the insurance company starts paying. So, for example, if your excess on accidental damage is £100 and you claim for a camera that was accidently broken and was worth £150, you would in fact only receive £50 if your insurer paid out. It’s usually a fixed amount of any claim that you have to pay before the claim is settled.
The excess for different elements of your contents or buildings insurance may vary. For example, your insurance provider may have a £100 excess for accidental damage but a £300 excess for damage arising from an escape of water. It is very important to check what your excess is and whether it is the same for the whole of your policy.
Many insurance companies have a standard excess but this can vary from company to company. It is possible to decide your own excess but if you choose to have a very low excess, your premium will most probably be more expensive. Conversely, if you choose to set a very high excess, you may actually see a reduction in your annual premium. It is important to take in to account the likelihood of you making a claim for a smaller item or repair. It is impossible to predict how many claims, if any, you may have to make but think carefully before setting a particularly high excess as you will need to be able to meet this amount if you need to claim.
Remember that a high excess is not the only way to find the cheapest home insurance policy. You can help reduce the judged risk to your home and boost your attractiveness to an insurance company by fitting the best locks on doors and windows, installing burglar alarms and fitting smoke detectors.
Read more in our home insurance guides or get a quote now.