This is a very common question these days, as the practice of including excess is becoming more popular in travel insurance. But a lot of people don’t usually read their policy’s terms and conditions. And when they do, they don’t really understand terms like “excess”.
What is “Excess”?
When it comes to travel insurance, the excess is the amount you pay first before the insurance company pays the remaining costs up to the limit of your cover. For example, if you have an excess of £500 and you file a claim for £1500, you pay the £500 and the insurance company covers the remaining £1000.
Of course, the coverage will also determine how much you and the insurance company will pay altogether. For instance, you may have an excess of £500 and a maximum coverage amount of £10,000 and the total costs of your insurance claim is £12,000. You pay the first £500, the insurance covers the next £10,000 and then the rest of the £1500 also comes from your own pocket.
Advantages of Excess
The main advantage of having an excess is that you can get very low premiums for your travel insurance. You can then have more money to enjoy yourself when you go on holiday. The higher the excess, the lower the premiums. That means you’ll need to balance what you can stand to pay for yourself for the excess and what you can stand to pay on premiums.
At the same time, you still have insurance coverage for major costs and losses. Having travel insurance is crucial these days, because the feeling of vulnerability when your travel without insurance can really dampen your enjoyment. You may feel too afraid during your vacation imagining all the horrid things that can happen which you then have to pay for.
Your excess also means that you can set a level of loss which you can tolerate. For example, you can have an excess of just £100. This may mean higher premiums, but at least you’ll have some coverage if the amount of the claim is significantly greater than the excess. In general, though, the amount of the excess is much lower than the amount of the coverage, so when something major happens the insurance will still cover the bulk of the costs.
The Increasing Popularity of Excess in Travel Insurance
All manners of travel insurance can include excess these days. Insurance against theft, medical insurance, cruise insurance, and even car rental insurance can include this feature. When you are getting travel insurance, you should ask about excess so that you can negotiate for lower premiums. Some excess levels may be standard for some insurance agencies, but if you want you can ask for a higher excess.
So if you are going on holiday, try to get excess travel insurance for yourself. It doesn’t add much to the cost of your expenses, and at the same time you get coverage only for major costs. This means you pay less so you have more money to enjoy yourself.