Contents insurance covers items in your home. But what about items that you take out of your home, such as your sports equipment or portable electronics? Learn about how Portable Items Cover can help protect your valuables.
Property
Which excess amount should I choose?
Basic excess
Accidental damage excess
Decreasing your excess
What types of excess are there for car insurance?
What is an insurance excess and what will it cost?
The term ‘excess’ is commonly used when dealing with insurance documents, but what does it mean, and what will it cost?
When you purchase a home insurance policy or a car insurance policy, it may come with a variety of excess options. This excess is the fee that you agree to pay out of your own pocket if you make a claim for an insured event or incident in the future.
Your excess options are dependent on what's offered by the insurer. It’s important to know that the excess you choose affects your premium, which is the amount you pay an insurer for insurance cover. Premiums are usually paid monthly or annually. If you choose a higher basic excess on your policy, you can decrease your premium, and if you choose a lower basic excess, it may increase your premium.
It is worth thinking carefully about the excess you choose when you purchase a home or car insurance policy. While it is cost-effective to pay lower premiums, you need to consider your capacity to pay a higher excess payment in the future if you need to make a claim.
More: What does sum insured mean?
When does an excess apply?
An excess is the amount you pay when you lodge a claim.
For home insurance, you may have to pay more than one type of excess depending on your circumstances.
For car insurance, the type of excess you need to pay depends on what your claim relates to and who was driving your vehicle.
Which excess amount should I choose?
Depending on your policy and the type of claim you make, different excesses may apply.
Consider the amount you want to set for your excess. Choosing a higher excess can save you money in the short term, but you need to be sure you can afford to pay it if you need to make a claim. Setting the excess too high could leave you in a difficult financial situation when an unexpected event occurs.
When reviewing the excess options, consider your financial situation, the likelihood of making a claim and your risk tolerance.
More: How to find a home insurance policy that suits your needs
It's important to choose the most suitable type of home insurance cover for you.
Home insurance excess options
Home insurance helps provide peace of mind for homeowners, renters and landlords. It generally covers your home, contents or both against certain unexpected events, such as storms, flooding, fire and theft.
For example, every RACV Home Insurance policy comes with a variety of excess options. These are outlined below and in detail in the Premium, Excess and Discounts Guide (PED).
What types of excess are there for home insurance?
It’s important to choose the right type of home insurance for you. RACV Home Insurance offers three types of excess:
Basic excess
This is how much you pay when making a claim, including claims for optional fusion cover and portable items (if you’ve added them to your policy). Your basic excess can be $100, $200, $300, $500, $750, $1,000, $2,000, $3,000, $4,000 or $5,000. If you’re aged 50 or older, you can choose a $0 excess. Remember, choosing a higher basic excess can reduce your premium.
Accidental damage excess
If you choose to add accidental damage cover and make a claim, you’ll pay a $300 excess instead of your basic excess.
Special excess
A special excess may apply for one of the listed events. A special excess is payable in addition to your basic excess. Any special excess applicable to your policy will be shown on your current Certificate of Insurance.
Can I change my home insurance excess?
When you start a Home Insurance policy you can select the excess that suits you. By choosing a higher basic excess can reduce your premium. But if you make a claim, you'll pay more out of pocket.
Changing your excess may also affect the types of incidents for which you can make a claim. For example, if the damage is not above the basic excess, you’ll be unable to claim.
Increasing your excess
If you have a RACV Insurance policy, you can do this at any time during the policy period, if no claims are pending.
Decreasing your excess
If you have an RACV Insurance policy, you can only do this when your policy is due for renewal, and no claims are pending.
Your current Certificate of Insurance shows the amount and types of excesses that apply to your policy.
If you have a car insurance policy with RACV Insurance there are three types of excess to consider.
Car insurance excess options
Car insurance helps protect your vehicle from loss or damage - whether you need cover for your own car, or damage to third parties.
If you have a car insurance policy with RACV Car Insurance, there are three types of excess: Basic, Age and Special. Some situations where you'll need to pay an excess include:
- you or the person driving your vehicle was at fault in an incident
- the incident wasn't your fault but you don't have the details of the at-fault party
- the damage is caused by collision with an animal
- your car was damaged by an event (such as hail, or a tree during a storm).
What types of excess are there for car insurance?
It’s important to choose the right type of car insurance for you. RACV Car Insurance offers three types of excess:
Basic excess
If you make a claim, a basic excess may apply. The basic excess is determined at the time a policy is taken out based upon the type of insurance you have chosen and whether you are insuring a motor vehicle or a motorcycle.
The basic excess amounts also depend on whether you have chosen RACV Complete Care® Motor Insurance, Comprehensive, Third Party Fire and Theft, or Third Party Property Damage. In the case of a motorcycle, your choices with RACV Motorcycle Insurance are Comprehensive or Third Party.
If you choose a higher basic excess on your policy, you can decrease your premium. You should make sure the basic excess you choose is appropriate for you, considering the limits of your cover, including any additional covers or options.
To find out the basic excess amounts, see the Premium, Excess and Discounts Guide (PED).
Age excess
This excess is paid in addition to any basic excess and applies to:
- any driver under 25 years of age, or
- any driver 25 years of age or over with no more than 2 years driving experience after obtaining a provisional or probationary licence
but does not apply to:
- a learner driver who was accompanied by a fully licensed driver aged 25 years of age or more.
To find out the age excess amounts, see the Premium, Excess and Discounts Guide (PED).
Special excess
RACV Car Insurance may decide to apply a special excess to an individual owner or driver, or in relation to a specific incident, taking into account such factors as the type of vehicle and owner or driver incident, claims or traffic offence history.
The amount of the special excess will be shown on your current Certificate of Insurance and generally ranges from $200 to $2,500.
A special excess is payable in addition to your basic or age excess where applicable. You cannot pay an additional premium to remove a special excess.
If you have RACV Complete Care® Motor Insurance, your policy covers you for windscreen damage.
What are the policy options for car insurance?
Depending on the cover you choose, you may add the following policy options to your policy by paying any additional premium that applies:
- Hire Car option
- Windscreen option
- Any Repairer option.
If you have Complete Care, your policy automatically covers you for a hire car after an incident, windscreen damage with no excess and access to any licensed repairer of your choice at the time of a claim, including RACV partner repairers. Any options you choose will be shown on your current Certificate of Insurance
Are there any instances when an excess does not apply?
There are several instances in which you may not be required to pay an excess when you make a claim, depending on your policy inclusions. These are specific to the type of insurance you have: either Complete Care, Comprehensive, or Third Party Fire & Theft.
When you start a claim online, you'll find out whether an excess is payable. If you have an excess to pay, you can log in to pay it online. For more detailed information, and to find out when an excess does not apply, see the Premium, Excesses and Discounts Guide (PED).
Can I change my car insurance excess?
If you have Complete Care or Comprehensive policies with RACV Car Insurance, you can choose your basic excess amount when you join or renew your policy.
- If you want to increase your basic excess, you can do this at any time. Keep in mind if you choose a higher basic excess, it may decrease your premium.
- Changing your excess may also affect the types of incidents for which you can make a claim. For example, if the damage is not above the basic excess, you’ll be unable to claim.
- You can only decrease your excess when your policy is due for renewal, and no claims are pending.
Your current Certificate of Insurance shows the amount and types of excesses that apply to your policy.
The information provided is general advice only. Before making any decisions, please consider your own circumstances and the Product Disclosure Statement and Target Market Determinations. For copies, visit racv.com.au. As distributor, RACV Insurance Services Pty Ltd AFS Licence No. 230039 receives commission for each policy sold or renewed. Product(s) issued by Insurance Manufacturers of Australia Pty Ltd ABN 93 004 208 084 AFS Licence No. 227678.
