If you're a driver or vehicle owner in New Zealand, you've likely come across the term "excess" while exploring car and motorcycle insurance policies. It’s a key part of any vehicle insurance agreement and can impact how much you pay if you need to make a claim. But what exactly is excess, and how does it work? Here's a simple guide from Assurant to help you understand.  

What is an excess?  

An excess is the amount you agree to pay out of pocket when making a car or motorcycle insurance claim. Essentially, it’s your contribution towards the cost of any damage or loss covered by your insurance policy. So, at Assurant, if your claim has been accepted, we’ll pay the remaining costs beyond your excess amount. Think of it as a shared cost between you and Assurant.  

Example: 

If your claim has been accepted and the repairs after an accident cost $2,000 and your excess is $500, you’ll pay $500 while Assurant will cover the remaining $1,500.  

Why does Assurant charge an excess?  

Charging an excess serves two main purposes: 

  1. Keeps Premiums Lower: By contributing a set amount to claims, Assurant can reduce the overall cost of providing coverage, which helps keep premiums more affordable. 
  2. Discourages Small Claims: The excess cost discourages policyholders from making small claims for minor damages, which also helps reduce administrative costs.  

 Types of Excess for Car and Motorcycle Insurance  

 There are several types of excess that Assurant have:  

  1. Standard Excess: This is the default amount you’ll need to pay when making a claim. The amount is outlined in your policy and applies to most situations.  
  2. Voluntary Excess: On Assurant's standard car insurance policies, Assurant allows you to choose a higher excess in exchange for lower premiums. Opting for a higher voluntary excess can discount the amount you pay on your premiums. This excess is in addition to the standard excess.  
  3. Age/Experience Excess: This applies to our standard car insurance policies for younger drivers (under 25 years of age) or those drivers that are 25 years of age or over that haven’t held a full New Zealand Drivers Licence for the 24 months immediately preceding the date of a claim. As they are considered higher risk. This excess is in addition to the standard excess. 
  4. Unnamed Driver/Rider Excess: This applies to our standard car and motorcycle insurance policies where the driver or rider at the time of an accident wasn’t named on the policy. This excess is in addition to the standard excess.  

How do you pay an excess?  

You’ll be asked to pay the excess either to Assurant or directly to the repairer, or we may deduct the excess from the claim before paying it.

Can you lower your excess?  

Yes, you can often choose a lower excess, but this will usually increase your insurance premiums. When deciding on your excess amount, weigh the trade-off between lower premiums and the out-of-pocket cost you’d be comfortable paying if you need to make a claim.  

Are there situations where you don’t pay an excess?  

Yes, if Assurant accepts that an accident wasn’t your fault and you can provide us with the name, address, and phone number of the at fault driver or rider and the registration number of their vehicle, we won’t apply your excess or penalise you when your policy renews.

Choosing the Right Excess for You  

When selecting your car insurance policy, think about your financial situation and what would be manageable in the event of a claim. Here are a few considerations: 

  • If you prefer lower premiums and feel confident you won’t need to make frequent claims, opting for a higher excess could be a practical choice.  
  • If you’d rather limit your financial liability in the case of an accident, a lower excess might bring peace of mind, even if it costs slightly more in premiums.  

Final Thoughts  

Understanding excess is an essential part of managing your vehicle insurance. By knowing how it works and what kinds of excess could apply to you, you can make informed decisions about your policy and budget for any potential out-of-pocket costs.  

If you’re still feeling unsure, take the time to read Assurant's Car Insurance Policy Wording or Motorcycle Insurance Policy Wording. Or please do not hesitate to contact Assurant to clarify any details. Being well-informed can save you money and stress in the long run.

Not insured with Assurant? Get an Assurant car or motorcycle insurance quote today, to find out how quick and easy it is to insure your vehicle with Assurant. 

Note: This a general guide designed to assist you to assess some of the key considerations.  It is not advice and in all cases the actual terms of the applicable policy apply.