When you insure your property against damage of any sort, you should always insure it for its full value. Most policies, however, include an ‘excess’. This is a fixed amount that you have to pay yourself if you make a claim. Your insurance company will then pay the rest.
As an example, if your home insurance policy has an excess of £100, and a burst pipe causes £500-worth of damage to your home, then you have to pay the first £100 of that. Your insurance company will cover the remaining £400. If the total damage was £1000, you will still pay the fixed excess of £100, and your insurer will pay the remaining £900 (unless your policy includes a higher fixed excess for larger claims).
A compulsory excess is generally applied to every policy and the amount is set by the insurance provider. This will generally be anything from £50 upwards. On top of this, you can choose to have a further excess amount, which is voluntary. In most cases, the higher the voluntary excess, the lower your monthly premiums will be.
Different kinds of claims will often incur different excess rates, although these will be set out in advance. Subsidence claims usually have a high level of excess, equalling £1000 or more, because these are generally very expensive claims that occur infrequently. Accidental or malicious damage cover on your property insurance can also have a higher rate of excess than your policy’s standard excess rate.
How does excess protection insurance work?
To guard against large excess payments, you can take out excess protection insurance. This is also known as insurance excess cover or excess reimbursement insurance. This allows you to claim back the excess amount in the event of you making a claim on your existing policy. It is generally bought as part of your home, property or landlord insurance package and is not usually available as a standalone policy.
This allows you to claim back the excess amount in the event of you making a claim on your existing policy.
Alan Boswell Group offers excess protection insurance for landlords and property owners from as little as £20 per year per property. You can choose the maximum amount or annual limit that you want to be insured for, typically from £30 up to £3000. This applies to a specific property, but can be spread over multiple claims during the year.
Insurance excess cover provides reassurance to homeowners and property owners that they won’t have to pay a large excess in the event of an insured incident. Although you will have to pay the excess first and then claim it back, in the long run, you won’t be left out of pocket if anything goes wrong. This policy is especially popular with landlords as they have to trust their tenants to look after their property, and some may not be as careful as others. Having excess protection insurance means that landlords won’t suddenly be faced with a large bill if their tenants, or their tenants’ guests, cause damage to their property.
Having an insurance policy on your insurance policy might seem odd, but it’s fairly common practice. Give us a call today to find out how excess protection could work to your advantage.