A customer compares policies and chooses the cheapest annual premium. To reach that figure she selected a substantial voluntary excess.
Eleven months later she makes a claim. The compulsory excess applies, her voluntary excess applies on top, and a further excess applies to the particular element she is claiming for.
The total she pays toward the claim is several times what she saved on the premium. Nothing was concealed, and nobody at any point did the arithmetic with her.
What somebody actually pays on a claim
Three components. The compulsory excess, the voluntary excess and any additional excess attaching to the specific circumstances.
Component 1: the compulsory excess
Set by the insurer, not chosen, and frequently varying by the type of claim within the same policy.
Component 2: the voluntary excess
Chosen to reduce the premium, remembered as a single figure, and applied on top of the compulsory amount rather than instead of it.
Component 3: the additional excesses
Applying to particular causes, parts or circumstances, which most customers do not know exist until a claim.
A worked example on a small claim
Where the total excess exceeds the value of the claim entirely, which means the cover is effectively unusable for that situation.
The same policy on a large claim
Where the excess is a small proportion and the cover does exactly what it should, which is the situation the arrangement actually suits.
Why the premium saving should be compared to the risk
A modest annual saving against a substantial excess is a poor trade for anybody likely to make a small claim and a good one for somebody insuring against catastrophe.
Why small claims frequently should not be made
Since the excess and the effect on future premiums together can exceed the payment, which customers need to be told rather than discovering.
Why the excess should be stated at quotation
Every component of it, since the premium comparison is meaningless without it.
Why people forget what they chose
A decision made eleven months earlier during a price comparison, which is why it should be restated at renewal.
Why the renewal is the moment to revisit it
Since circumstances change, which is the ground in the renewal questions every insurance broker hears.
Why the information gathering matters
Since accurate details produce accurate quotations, as in what details a broker needs for a first quote.
Why the excess affects whether cover is worth having
A policy whose excess exceeds any realistic claim is not cover, and telling somebody that plainly is better service than selling them a premium that can never pay out.
Why a protected no claims position is separate
Customers conflate the two constantly, and understanding that one affects the premium and the other affects the payout is what makes a comparison meaningful.
Do the claim arithmetic before the policy is bought
An assistant that states every excess that could apply, models what a realistic claim would actually cost the customer and compares that against the premium saving prevents somebody choosing the cheapest policy and discovering it was the most expensive. A comparable cost structure appears in insurance and funding questions at private clinics, and coverage in answering service area questions. See pricing, run the numbers on the chatbot ROI calculator, and the sector view sits under insurance.