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Difficulty: EasyMotor Insurance Coverage and Legalities

When making a claim on your motor insurance policy, what does the term 'excess' mean?

  1. A
    The maximum financial payout your insurer will contribute towards an approved claim
  2. The amount of any claim that you must pay yourself towards the costsAnswer
  3. C
    The additional surcharge applied to your annual premium after adding a newly qualified driver
  4. D
    The fixed administrative fee required by the police to file an official road traffic report

Answer

The amount of any claim that you must pay yourself towards the costs
An insurance excess is the specified portion of any claim that the policyholder must pay personally before the insurance company pays the remainder of the repair or compensation bill.

Step-by-Step Solution

1
Identify the core insurance term being questioned
The term is 'excess' in the context of motor insurance policies.
Understanding key contractual terms is essential for managing vehicle documentation and coverage under UK driving regulations.
2
Differentiate between policyholder contributions and insurer payouts
An excess is the agreed sum the policyholder pays out of pocket before the insurer covers the remaining balance of an eligible claim.
Policies combine voluntary and compulsory excess to determine how much financial responsibility the driver retains for damage or loss.

Key Concept

Motor insurance policy excess and claim contributions
Estimated Time:45s
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Topics

Motor Insurance Coverage and Legalities

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