All insurances are subject to an excess, and this means that the pre-determined first part of any claim is not covered.
Different policies have different excesses so you will need to be aware of the level of financial contribution you will need to make towards your claim.
When you arrange your insurance it will be made very clear as to the level of excess that will apply for which events. Each policy has a standard level of excess. It is usual that a different excess will apply to different types of claims. For example, your home insurance policy may have, for all claims except escape of water, an excess of £100.00. For escape of water the excess could be £250.00, or more.
Can you increase the standard excess to an higher level of your choosing to reduce the premium? Usually, yes, but you should weigh up the potential premium saving against the size of the excess. If you save £5.00 on your premium and increase your excess from £100.00 to £250.00, is it worth it?
You must be aware as to whether the excess applies to the buildings separately, and the contents separately. If you have one claim affecting both buildings and contents is there one excess deducted, or two?
Caution must be exercised if you wish to have a large excess. If the claim occurs, are you able to easily find that level of money to cover your excess? You may have saved a percentage of the premium, but at the time it matters most, do you have the cash available?
For self catering insurances the level of excess is usually the same whether an escape of water claim, or anything else. Typically, the excess is £100.00 or £250.00 with no larger excess for escape of water claims. We have seen an excess of £500.00 (on policies not used by us) for escape of water, so make sure you are aware before the claim occurs!
David J Morris ACII
Chartered Insurance Broker
J L Morris (Insurance Brokers) Limited