What is an Excess, and why should I care?

It goes without saying: sometimes get what you pay for. So choosing a tools insurance policy shouldn’t necessarily be all about the price. That said, pressure on finances is a consideration for most of us, and nobody wants to pay more than they have to for anything.

With an insurance policy, the price you pay is mostly down to what you’re insuring, the likelihood of you claiming, and the likely amount of the claim. Unless you mislead the insurance company, the price is mostly beyond your control.

The one way that you can usually influence the price you pay for your insurance is by choosing a higher excess. But what is excess? And what does it do? In this article, we’ll look at the types of excess, how you can reduce your premium, and a few other things to consider.

What are the types of excess?

Excesses are either Compulsory or Voluntary.

A Compulsory excess is one that the insurance provider automatically applies to the policy, and that you have no control over. For example, with car insurance, you might drive a high performance car, or live in an area with a high likelihood of car theft or damage, or have a track record of claiming. As a result a car insurance provider might automatically apply a Compulsory excess. This reflects their view as to how likely you are to claim. You might not like it, but there’s little you can do about it, except find another insurer.

A Voluntary excess is one that you can select yourself. In part, it’s your way of saying to the insurance company “I don’t think I’m likely to claim, so I’d like to pay less as a result.” The higher the voluntary excess you choose, the less you will generally pay for your policy.

Cumulative excesses

On many insurance policies there are both compulsory and voluntary excesses. What is also important to be aware of is the fact that excesses are cumulative. This means that if you have a compulsory excess of £100, and you also choose a voluntary excess of £150, in the event of a claim, you could end up having a claim payment reduced by a total of £250. Having multiple excesses is common on home insurance travel, insurance and car insurance.

Should I choose a high voluntary excess?

There are some apparent benefits to choosing a higher voluntary excess. A higher voluntary excess generally leads to a reduction in the size of your premium.

This has to be weighed against the higher cost if you do make a claim. If you make a claim against your tools insurance policy, and the claim is paid, the amount that is paid to you will be reduced by the amount of your voluntary excess. So, while you might save money in the short-term, it could cost you more in the long-run. There’s no right or wrong answer - it’s just a matter of personal risk.

ToolsInsuranceOnline excesses

The good news with ToolsInsuranceOnline is that we’ve kept things simple.

With ToolsInsuranceOnline, you can choose an excess of £50, £250 or £500, and the higher the excess you choose, the lower the premium.

There is a minimum £100 excess if you are making a claim for tools stolen from your vehicle. Where payment is made for computers, tablets or similar devices, the minimum excess will be £250.

What else should I consider?

Increasing your voluntary excess might be a good option to help you reduce the overall cost of your insurance, but it's important to consider the bigger picture.

So think about whether you can afford a high excess, whether you're likely to make a claim, and do a bit of research to get a clearer picture.

You can get more information on the tools insurance policy available at ToolsInsuranceOnline.

Full details of our Terms & Conditions, Limits, Excesses and Policy Exclusions can be found in our Policy Wording. ToolsInsuranceOnline do not offer advice relating to insurance, and you need to ensure that personal tools insurance you choose meets your demands and needs.