03 July 2019
The majority of insurance policies do not pay out the full cost of any claim you make under the policy. They apply what is known as a policy excess. This is an amount of money that is deducted from the total amount you are claiming.
So, for instance, you may have a motor policy with a policy excess of £250, your claim is for a total amount of £1,000, in which case you would receive a settlement of £750 from the insurance company.
The same situation applies in respect of contents insurance. It is therefore important to understand what your policy excess is before you take out the policy to ensure you know exactly what you are expected to pay towards any claim you make.
Clearly the lower the policy excess the more you will be paid by the insurer if you make a claim.
In the case of the retirement contents policy offered by FirstPort Insurance Services the excess is exceptionally low at £25. So when we settle your claim, maybe for the loss of an expensive hearing aid or mobility scooter, you will be paid the full cost of the claim minus £25.
The excess under our retirement contents policy is very low compared to that imposed by many of our competitors. We pride ourselves on the fact we are able to offer such a low excess while at the same time offering an extremely competitive premium and very wide breadth of cover.
It is important to ensure you consider the level of policy excess when choosing your insurance cover. There is a big difference if you are claiming for a laptop that costs £500 to replace and you have an excess of £200, compared to one of £25. You need to make sure you can afford to pay the excess whatever it might be, you never know when you might need to make a claim.
Some insurance policies have different excess amounts for different types of claim. Using a buildings policy as an example, you may find an excess of £1,000 if your property suffers from subsidence, or an excess of £500 if your home has suffered water damage as a result of a leaking pipe. Other types of claim, such as malicious damage may only have an excess of £100.
As well as the premium you pay for the insurance policy, excesses can also reflect the level of risk the insurance company is taking by insuring your property, whether it is the building or your belongings. If your property has a history of subsidence or flooding you could see a higher than standard excess for those types of claims.
If you would like any information on the insurance cover we offer please contact us.