What You Need to Know About Excess (Advanced) - Part 2

I'm going to talk a little bit more on excess that you'd need to pay in the event of an accident first before we move on to see how it relates to your premium.

After all, a lot of us might not be aware of the possibly additional excess imposed by the insurer on the policy which is usually reflected somewhere clearly in the terms & conditions. I have listed down a few common ones for your reference.



1. Unnamed driver compulsory excess

Some insurers impose an additional excess in the event that the driver of the accident is not named under the policy. The rationale is very simple; if the driver is not named, the risk uncertainty is higher and the premium collected might not be sufficient in the first place.

2. Elderly, Young and Inexperienced Driver (EYIDR)

It is not uncommon for insurers to charge additional excess for drivers that fall under EYIDR category. The criteria of EYIDR differs among insurers but that's beside the point. The idea is insurers practice it and as insured, you have to refer to your terms & conditions in order to protect your interest. As a guide, the criteria might be anyone who is less than age 26, anyone who is more than age 65, and/or anyone who has less than 1 year of driving experience.

3. Third party excess

This is very rare and insurers seldom practise this. Third Party excess simply means that in the event of an accident, if there is any Third Party claim against your policy, you (as the insured) will need to pay the Third Party Excess. Of course, if you are claiming against your own damage, you will also need to pay your own damage excess. In the end, you will need to pay for 2 types of excess. Wow! So, why will insurer impose such a term? It is usually for abnormal or not preferred risk and in order to protect their own interests, the insurer might consider this option before they agree to underwrite the risk.