Cost of Insurance and a Policy Excess

[Guest Guest62720]

I am a Director of Insure-Your-Move.com

 

In recent weeks, we have seen a growing number of enquires regarding the application of an excess and how it affects the cost of insurance. Below we have attempted to set out some detailed information which we trust will assist you in your decision making process.

 

 

What is a policy excess?

The excess is the amount YOU have to pay if you make a claim on your insurance before the benefits of the Policy can apply.

Why do some Insurers apply an excess and others don’t?

Without an excess it is argued claims would increase dramatically and, ultimately, the cost of insurance would have to rise.

Alternatively, some would suggest it is the responsibility of Insurers to pay the entire claim and that the Policyholder should not be disadvantaged as a result of goods being damaged in transit through no fault of their own.

How does an excess apply?

In the event of a claim for loss or damage, for example in the amount of £ 500 for a damaged washing machine, Insurers will adjust the claim in accordance with the Terms and Conditions and then deduct the excess from the amount being claimed. Some Insurers may apply an excess of up to £ 250 therefore you could end up with a settlement figure of only 50% of your claim.

Equally if your claim is for less than the Policy excess then you will be out of pocket as Insurers will have no liability.

Does carrying an excess save money?

In our opinion, no.

For instance, if you are moving to Australia and insuring your goods for £ 30,000 then a typical premium without an excess would be around £ 450.00.

With a £ 250.00 excess then we would expect a typical premium to be around £ 400.00. A potential small premium saving of only £ 50.00.

However, in the event of claim for £ 500.00, you may have to pay an excess of up to £ 250.00, therefore your total outlay could be £ 650.00 (being the premium of £ 400.00 plus the excess of up to £ 250.00).

What are the chances of having a claim?

However careful your chosen removal company takes in packing your goods the rigours of an international removal are such that there are many outside factors such as transportation to and from the docks, shifting off goods inside the container due to heavy weather on the high seas, lifting of the container on and off the ocean-going vessel, customs/aquis inspection, handling and unpacking by the destination agent etc, which are well beyond the control of your removal company, which could lead to loss or potential damage to your goods.

What are our recommendations?

We believe each move is individual but the dynamics are the same and like most people on this forum, it would appear they seek 3 or 4 removal quotes. Likewise, we suggest you seek alternative quotes for insurance and always ask if there is a Policy excess. Equally, carefully consider the true cost if your Policy does carry an excess, as the initial saving in premium could result in you being considerably out of pocket in the event of a claim.

 

 

We trust this information is of use and we are amenable to respond to any questions the foregoing raises either through this thread or PM.

 

 

[Guest The Pom Queen]

It seems that members think highly of your services. I know from personal experience our insurance was going to cost a few thousand dollars for our interstate move, we looked elsewhere and got the same thing (in fact it was a better policy) for half the price, we needed to claim and it was sorted no problem.