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Increased excesses put people off claiming

Increased excesses put people off claiming

Category: Insurance

Updated: 09/10/2013
First Published: 09/10/2013

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

New research by Sainsbury's Bank has revealed that higher premium excesses put a large proportion of people off making a claim, even if they increased their excess voluntarily.

The study found that even though 15% of adults surveyed had voluntarily increased the excess on their car or home insurance over the last three years, 21% of those subsequently involved in an incident hadn't considered the implications of a higher excess when making a claim.

Thirty-eight percent had to use savings in order to cover the excess whilst 16% used a credit card, and the same percentage had to borrow money from friends or family members.

And, in 35% of cases, they'd raised their excess so much that they felt it wasn't worth making a claim at all.

Striking the right balance

The research highlights the importance of striking the right balance in terms of initial outlay and potential future costs.

Whilst opting for a voluntary excess might reduce monthly premiums, with the average excess increase being £327 it could be difficult to cover the cost of a future claim.

Ben Tyte, head of insurance at Sainsbury's Bank, said: "Insurance is there to assist you when you need it most. If you're thinking about selecting a higher excess to reduce your monthly premium, be sure that this won't cause you any financial difficulty when it comes to making a claim.

"We'd encourage homeowners and motorists to think carefully about the excess they select on their policies, as well as ensuring they choose good quality cover."

What next?

Compare car and home insurance policies to find the best deal

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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