As explained by McCormick Insurance Inc., whose serving city is Pembroke Pines, FL, excess insurance is the amount the policyholder is expected to pay against a claim before the insurance provider pays the rest. If the excess of your insurance is $800 and you are making a claim of $2,500, you will pay the $800 and your insurance company will pay the remaining $1,700.
Excess insurance benefits both the policyholder and the insurance provider. If not for excess insurance, you and other policyholders will make claim for every little amount of money you spend on your car.
If you fix a simple scratch, you will file a claim. In fact, you will strive to make the best of your policy at the expense of your insurance company. Here is how the policyholders benefit from it. As a response to policyholders making claims all the time, the cost of auto insurance will be jerked up so high and car owners will struggle to pay for it.
It is also necessary to add that the amount differs from company to company and it also depends on several factors like the age of drivers. A driver whose age is lower than 25 years will have little driving experience and may likely encounter more damages so the excess amount for such drivers will be high.
Most importantly, you can raise your excess higher or lower to reduce or increase your premium amount since it varies transversely with your premium. If the excess amount is higher, your premium will be lower.
A lot of car owners focus on policies with lower premiums and higher excesses because they feel premium is certain, excess is a possibility but it is better to strike a good balance between the two of them because the payment of an excess could erode all what you saved from the lower premium.
For more information contact McCormick Insurance Inc.