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More people have to pay Insurance Excesses

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Research by analysts Defaqto has revealed that excesses on insurance policies have continually increased since 2008.

The independent financial research company studied the excesses charged on a range of general insurance policies since 2008, including travel, motor, buildings and contents insurance. The results have shown that more insurance policies now contain excesses than in previous years

In 2008, only a quarter of car insurance policies had a windscreen excess of £75 included as part of the cover. Now almost half of all car insurance policies have a windscreen excess built-in.

Similar results were found with home insurance excesses. Half of home insurance policies now have a standard excess of £100, compared to just a third of policies in 2008.

The Association of British Insurers (ABI) advises that policy excesses help to keep premium fees lower.

False Economy

Defaqto believe that consumers tend to focus on the premium price rather than the terms and conditions of a policy, and this is resulting in a false economy.

They believe a customer may feel like they are saving money by having a lower premium, but in the event of a claim may get stung with high excess fees, and by then it’s too late.

It has been known for customers to save £100 on Insurance premiums but then have to pay £750 in excesses when they make a claim warns one unnamed source.


The Financial Ombudsman Service (FOS) says it gets hundreds of complaints about excess charges every year.

Many of these relate to travel insurance where a policy holder could end up paying several excess charges for just one claim.

The analysis researched by Defaqto shows that a lot of travel insurance policies can apply an excess charge for different sections of cover on the insurance policy.

What this could mean for example is that if someone was the victim of a robbery on holiday and had their bags stolen, they could end up paying an excess for baggage, for money, for valuables and for the passport.  So in the event of a claim four excesses would have to be paid.

One unnamed policy that is proving popular with travellers is sold at a low premium, but charges £75 on each of those sections. That would mean in that instance; the claimant would be charged £300 in excesses.

The research revealed that a number of travel insurers apply excesses by policy ‘sections’, 78% of annual policies and 83% of single trip policies apply excesses per section, compared to 67% and 73%, three years ago.

By Ben Malkin
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