Car insurance excess is the amount that you will have to pay in order to facilitate a claim. It is essentially your co-payment for the claim. It is also one of the important considerations when signing up for car insurance in South Africa, as there is a massive variation in the excess payable from one company to another, as well as among the different types of claims. All to often consumers get shocked with a high excess at the time of the claim purely due to their own ignorance and not reading the fine print at the time of buying car insurance cover.

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How much is car insurance excess?

There is no set rate for car insurance excess. Sometimes it is a flat rate while at other times it is a percentage of the claim. Although there are several car insurance companies in South Africa, most charge an excess in the following manner :

  • a flat rate (usually around R250 to R500) for claims regarding the car windows,
  • a percentage of the claim for vehicle repaid after an accident, and
  • between 5% to 10% of the value of the car in the event that the vehicle is lost in theft, hijacking, a fire or written off in an accident.

However, it is important to discuss the actual car insurance excess with your company before even signing up for cover. Not only does the amount of excess that you will pay affect your monthly car insurance premium but it can also impact you financially at the time when you need to claim. It is also important to remember that if you have opted for motor vehicle and household insurance, the excess differs for claims on your home and claims on your car.

Monthly Car Insurance Premiums

The bottom line is that the car insurance excess that you opt for affects your monthly premiums. The principle is simple – the higher the excess that you opt to pay at the time of the claim, the lower your monthly car insurance excess. It may seem like a good idea to commit to a higher claim excess in order to lower your monthly premiums, but it is important to be certain whether you can afford the excess.

There is nothing worse than being stranded without a vehicle and held back from getting it fixed or replaced just because you cannot afford the premium. In this case, cheap car insurance may not seem as attractive as it was just because you saved on a higher premium by opting for a higher excess. In fact your excess should be calculated according to your budget. While you may think that you will save a few hundred rands every month to pay for the higher excess, chances are most people never do.

No Excess on Car Insurance Claims

Most insurers offer car insurance options where there is no excess payable. However, this cover is usually expensive and the monthly premiums can be crippling. It may seem like an attractive option initially but if you cannot sustain the cover then it defeats the purpose. Car insurance should be affordable for your individual budget. It is a form of protection for your car and even though the prospect of not paying an excess seems attractive, if you cannot afford the monthly premiums then you may have your cover lapse at some point and be unprotected for a period of time.

This does not mean that car insurance cover that offers a ‘no excess’ option is not better. Any person would be glad to not have to fork out a cent when they need their car repaired or replaced. But it is about sustainability at the end of the day. Consumers have to be cautious about cover that offers benefits like no excess waivers yet offer cheaper cover than other insurance providers in the market. You cannot have the best of both worlds – it is either a matter of lower monthly premiums and higher excess, or higher monthly premiums and lower or no excess. Bear this in mind when a broker or telesales agent is making promises of cheap cover with no claim excess.