However, 21% of those subsequently involved in an incident hadn't considered the implications in terms of the additional outlay, at the claim stage.
Most insurance policies will specify a standard excess which is the minimum amount to be paid in the event of a claim. It is now common place for insurers to also offer the option of adding a voluntary excess. This means new policyholders can choose to add an additional excess on top of their compulsory excess, increasing the amount that they will need to pay when making a claim. Opting to add a voluntary excess can have a favourable impact on the policy's premium and can make a significant difference to monthly premium payments.
The supermarket bank's research findings reveal that, over the past three years, 15% of adults have voluntarily increased the excess on their car or home insurance policies in order to reduce the premium, increasing their excess by an average of £327.
Sainsbury's Bank is encouraging motorists and homeowners to fully consider voluntary excess options as part of the whole picture. It's a good idea to look into whether upping the excess will make a valuable enough saving on a premium and, if it does, is the motorist / homeowner comfortable with the additional outlay, should they need to make a claim on their insurance policy?
Ben Tyte, Head of Insurances 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. For example, if you later feel that you can't justify a claim in relation to the excess, this could be an unnecessarily stressful and expensive experience. 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."
13% of car and home insurance policy holders who voluntarily increased the excess on their policies have suffered an accident or damage to their car or home that they could claim for under the terms of their policy. However, one in three of these people (35%) said it wasn't worth making the claim as they had raised the excess too much.
Nearly four in 10 of those who suffered an incident (38%) made a claim but had to use their savings to cover the excess, 16% had to use their credit card to pay the excess and 16% had to borrow money from a friend or relative to do so.
Ben added:
"Those considering raising their excess should also consider other ways to reduce their insurance premium, for example, investing extra time in shopping around for the best cover at the most competitive price and looking for discounts and benefits."
