Insurance Groups Explain Excess Charge

February 1 - When we're involved in an accident, even when it is not our fault, we need to pay an excess charge before the insurance policy starts to pay out.

According to Trevor Devitt of OUTsurance, an excess actually keeps our premiums lower.

"If there was no excess payable you would pay a higher premium," he said.

He added that even if the policyholder is not at fault, he or she would still need to pay the excess. "Most insurers will try and recover the excess (once you have paid it) from guilty party," he said.

According to the director of Auto & General Insurance, Angelo Haggiyannes, excess are in place to deter customers from making minor claims.

Many drivers are stunned to find out that they need to cough up money when they are involved in an accident that is not their fault.

"They are often shocked when they find out that not only must they pay an access, but in some instances their insurance cannot recover the excess because the other driver who was at fault is not insured," said the Managing Director of MUA Insurance Acceptances.

"Only about 30% of cars on South Africa's roads are insured, which means the excess can be reclaimed in just three out of 10 cases," she said.

She said that if the other driver is injured, one can recover damages and the excess if the insurance schemes what is known as a 'knock-for-knock' agreement.

The amount of the excess also depends on the time of the day.

"From midnight to 5 am there is a higher chance of accidents involving drivers who have been drinking, and since the insurer cannot rely on effective police work to prove such facts, they have taken the step of instituting time specific changes," explained Fourie.