Car insurance in Northern Ireland is no different from that elsewhere in a number of respects, including the fact that policies may contain what is called excess.
This is something that is sometimes misunderstood and occasionally resented, however, it is based upon some standard principles:
- car insurance in Northern Ireland is becoming increasingly competitive and insurers are under pressure to keep the price of their policies as low as is possible;
- they use a number of different techniques in order to try and do so and one of these is called excess (it is also sometimes referred to as the first part of a claim or the policy’s excess – and variations of thereof etc);
- the basic principle is that insurers may be able to offer more cost-attractive policy prices if the policyholder will agree to pay a specified amount towards the cost of any future claim – this payment is the excess;
- the reason that this may have a significant effect on the insurer is that it helps them to avoid needing to administratively deal with very large numbers of relatively trivial accidents and potential subsequent small claims – as these may be under the excess threshold of their policies;
- some insurers may have a minimum obligatory excess on their policies but also offer a range of additional and entirely voluntary excess amounts with the end result typically being that the higher the excess you agree to pay, the lower the cost of your premium may often be;
- sometimes, some drivers believe that the excess exists solely for the benefit of the insurance company, whereas in fact, the reduction in the administration effort involved in processing many more small claims and the fact that they have been able to share some of the cost of claims with the policyholder, typically means that they will be able to keep their total insurance costs down to their customers;
- car insurance in Northern Ireland with excess may also benefit some drivers by stopping smaller value claims going through that may, if allowed, put at risk their no claims discount.