A woman covering her face with her hand in disappointment while holding a bill on her other hand

Do You Have to Pay Excess If You’re Not at Fault?

November 9, 2023

Navigating the post-accident financial maze can be perplexing, particularly when facing the prospect of paying an excess on your car insurance. A common query is: "Do I have to pay excess if it wasn’t my fault?" The brief answer is, 'yes', initially you might - but whether you pay excess will typically depend on a number of secondary factors.

Whether you want to know more about how car insurance excess works, or simply need advice on how to proceed with a claim, in the following article we’re going to take a closer look at excess payments, and importantly, how fault factors into this equation. Let’s dive in!

What is Excess in Car Insurance?

In the world of car insurance, excess refers to the upfront amount you're obliged to pay when making a claim, irrespective of who was at fault. This sum is a pre-agreed amount set out in your policy, and is essentially a means of sharing the risk between you and the insurer.

There are generally two types of excess:

  • Compulsory Excess: This is a fixed amount set by your insurer based on the risk they perceive you to pose (age, driving history, type of car, etc.).
  • Voluntary Excess: This is an amount you voluntarily choose to pay, in addition to the compulsory excess. Opting for a higher voluntary excess can reduce your premium, but it also means you'll pay more if you make a claim.

Understanding Fault and Excess Payment

Now, taking a deeper look at the crux of the matter, the payment of excess is typically required when you lodge a claim, irrespective of fault. However, fault determination plays a pivotal role in whether you can reclaim this excess:

At-Fault vs. Not-At-Fault Accidents

An "at-fault" accident refers to a scenario where you are deemed responsible for the incident. In such cases, you will have to bear the excess, and it's unlikely you'll reclaim it.

Conversely, with a non fault accident claim, another party is responsible. You might still have to pay the excess upfront when claiming, however, if the third party admits liability and their insurer agrees, your insurer will often try to reclaim the costs, including your excess, from the third party’s insurance.

A man holding money while using a calculator

Paying Excess When Not at Fault

It might seem unfair to bear the upfront excess cost when you're not the culpable party, yet this system expedites your claim process: by paying your excess, you enable repairs or replacements to begin without having to wait for fault disputes to settle. This is particularly beneficial when the other party's insurer is slow to accept liability or if there are complications proving fault.

Yet, this doesn't imply you're left at a financial disadvantage. As the Citizens Advice Bureau points out, if another driver is at fault, you can reclaim not only your excess but also other costs you've incurred due to the accident.

Recovering Excess Payments

Once it's established that you weren't at fault, your insurer will step into the shoes of the 'subrogation' process. Here's what this entails:

  • Subrogation: Your insurance company will pursue the third party (or their insurer) to recover the funds paid out, including your excess. This is a standard industry procedure where insurers 'fight it out' behind the scenes. If successful, you’ll typically be refunded your excess.
  • Direct Claims: If your insurer is slow in recovering your excess, you can directly claim from the third party's insurer.
  • Utilising Legal Avenues: In situations where the third party denies liability or their insurer is unresponsive, considering legal help might be your best recourse, especially if significant sums are at stake.

Appealing Excess Decisions

If you find yourself in a quandary where your insurer refuses to refund your excess despite evidence of your non-liability, you do have options:

Internal Dispute Resolution

Before resorting to external channels, raise the issue within the insurer's internal dispute resolution department. They're mandated to review your grievance and provide an outcome.

Ombudsman Intervention

If the internal processes don't yield satisfactory results, the Financial Ombudsman Service can intervene. They provide an independent review of unresolved complaints, and their decision is binding on insurance companies.

Solicitors and Legal Counsel

When all else fails, engaging a solicitor experienced in road traffic accidents and insurance disputes can be your final arsenal. While this may come at a cost, some operate on a 'no win, no fee' basis, ensuring you're not further out of pocket.

Key Takeaways

The aftermath of a car accident is, without doubt, taxing, both mentally and financially. While paying an excess even when not at fault might seem like salt on the wound, understanding the dynamics can ease the process and increase your chances of reimbursement. Remember to document everything meticulously, from photos at the scene to correspondence with insurers.

Lastly, it's crucial to choose an insurance policy that aligns with your needs. Being informed about such intricacies, including aspects surrounding excess payments, can offer peace of mind during tumultuous times. So, the next time you're assessing your insurance options, ensure you comprehend all the terms, and don't hesitate to ask questions. After all, your insurance is a safety net, so ensuring it holds strong when tested is paramount.