New research from AXA car insurance shows that drivers are pushing up levels of excess in order to reduce premiums as people struggle to pay premiums.
Axa has seen a growing number of customers unable to authorise repairs to their damaged cars due to lack of cash to pay for the car insurance excess. In 2011, this number climbed by 61% leaving people with potentially unroadworthy cars or at the very least with damage that will deteriorate due to lack of repair.
Some 29% of motorists do not have enough readily available savings to cover their excess if required, according to AXA Nearly half the population (48%) has readily available savings of less than £500 and a third (34%) has less than £200.
Drivers pushing up voluntary car insurance excesses
The research found that 62% of motorists are aware that at least part of their excess is a ‘voluntary’ amount, in many cases pushing the excess they need to pay to an unaffordable level. And this number is increasing – average voluntary excesses at Axa have risen 10% in two years.
A further 17% of motorists are unaware of what type of excess they have.
Car insurance excesses should be realistic
Sarah Vaughan from Axa said of the findings: ‘We need to make sure motorists understand the level of excess they are committing themselves to when they buy their insurance and then to ensure it is at a sensible level for them. Around one in ten will have an accident each year, so there is a real likelihood that they will need to find the money at some point.
‘We appreciate that premiums have risen a lot in the last couple of years and we can understand consumers looking at ways of saving a bit of money. But if this means that they can’t afford their excess, it is a completely false economy.’
Which? car insurance analyst Paul Davies added: ‘Opting for a high voluntary excess can be very tempting when you’re arranging your car insurance, but this can prove a false economy if you have to make a claim.
‘Make sure that you’ve the money available to pursue a claim if you do have an accident. Our list of Which? Recommended car insurance Providers will also help you to choose a provider that doesn’t apply too high an excess.’