Insurance brokers are advising motorhome owners that choosing a higher voluntary excess on their motorcaravan insurance may cost them more in the long term because in some cases the impact on premium prices is minimal. Research analysed the cost of motorhome insurance using a range of voluntary excess levels, from £0 to £500 in order to evaluate the effect on prices of premiums. The research found a difference of around £180 to the yearly cost of premiums when comparing the average cost of a £0 excess to a £500 excess. However, a mobile home owner who opts for lower premiums and sets the excess level at around £500 could be creating a costly false economy should they need to make a claim on their insurance policy. This is because the difference in premiums is only £25 when comparing a £200 excess to a £400 excess. So anyone who is looking for competitive insurance needs to consider whether the short term savings are worth potential higher costs in the future.
Brokers advise drivers who are looking to cut costs to be aware that changing the excess level is not always a cost effective option. It’s crucial to set the total excess at a level the driver can afford to pay, and also one that makes claiming worthwhile. For example, if the driver had a £100 total excess and then made a claim for £500, the driver would have to pay the first £100 and the insurer would pay the remaining £400. However if there was a £500 excess the driver would have pay the entire amount, which makes a claim pointless. A broker can advise about excess levels before any policy is purchased. Drivers then may want to consider other ways to save money on premiums, and there are plenty of options. Fitting an approved alarm and immobiliser, such as a Thatcham 1 or Thatcham 2 should certainly cut premiums as should fitting a “smart box” particularly if you are a younger driver. The smart box monitors driving habits and will enable a young driver without a no claims bonus to demonstrate to insurers that he is a responsible driver more quickly than waiting for years of accident free motoring.
Another option is to ensure the premium charges reflect the mileage a driver will cover in a year; it is pointless paying for 20,000 miles worth of cover if the driver only travels 5,000 miles in the period.