What is an insurance excess?
The excess is the amount you agree to contribute towards your costs in the event of an insurance claim.
One of Canstar’s national ratings winners for motorcycle insurance, Swann Insurance, lists 5 types of excess in their PDS:
- Basic Excess: The excess everyone pays for making a claim on their policy, e.g. a fire damage claim under a Third Party, Fire and Theft policy. See below for the average excesses in our ratings.
- Age Excess: If you are under 25 years old or are an inexperienced rider, you will pay a higher excess. As you can see in the table below, the excess for an under-25 rider named on the policy ranges from $300 to $1,000.
- Licence Excess: If you have held your full licence for less than 2 years, you will pay a higher excess.
- Theft Excess: The excess you pay if your bike is stolen. The amount will be listed in your policy, and will usually be waived if your bike was stored in a locked building at the time of the theft.
- Undisclosed Rider Excess (a.k.a. Non-Nominated Rider Excess): If the person riding your bike at the time of an accident is not listed on your policy, you will pay a higher excess. The table below shows that a rider who is under 25 and not listed on the policy will attract an even higher excess, from $800 to $1,600.
When it comes to budgeting for the Basic Excess, you can usually choose to pay a higher premium in order to pay a lower excess or no excess. On the other hand, you could choose to pay a higher excess in order to have a cheaper annual premium – but you will have to shoulder more of the cost if you do make a claim.
If an accidental damage claim is not your fault, and you can provide the name, address, and registration number of the at-fault driver, most insurance providers will waive your excess.
How much am I likely to pay for the excess?
The insurance providers we surveyed for our motorcycle insurance ratings showed a range of excesses for each rider type, from charging no excess all the way up to charging a $1,600 excess for under-25 riders not listed on your policy.
| Provider | Under 25s excess (named) | Under 25s excess (unnamed) | Over 25s with less than 2 years’ experience excess | Inexperienced rider excess |
|---|---|---|---|---|
| AAMI Insurance | $400 | $800 | $800 | Excess varies |
| Famous Insurance | $1,000 | $2,000 | $1,000 | Excess varies |
| Insure My Ride | $400 | $800 | Excess varies | $800 |
| NRMA Insurance | $400 (NSW/ACT) $300-$400 (TAS) $300 (QLD) |
$1,600 (NSW/ACT) $1,200 (TAS) $1,600 (QLD) |
$1,600 (NSW/ACT) $1,200 (TAS) $1,600 (QLD) |
$1,600 (NSW/ACT) $1,200 (TAS) $1,600 (QLD) |
| RACV | $400 | $1,600 | $400 | No excess |
| SGIC Insurance | $300-$400 | $1,200 | $300 | No excess |
| SGIO Insurance | $450-$750 | $1,250 | $300 | No excess |
| Shannons | $400 | $1,500 | Excess varies | Excess varies |
| Suncorp Insurance | $400 | $800 | Excess varies | $800 |
| Swann Insurance | Excess varies | Excess varies | Excess varies | Excess varies |
| YOUI | No additional excess | $2,000 | No additional excess | No additional excess |
Source: www.canstar.com.au
“Excess varies” means that an excess is charged in this case, but the amount of the excess depends upon certain conditions.
“No excess” means that no excess is charged in this case.
Generally you don’t buy the first car insurance policy that comes to mind, so why would you when you buy your bike. Doing a quick bit of research on the Canstar website before signing up your bike for insurance only takes a few minutes, but it could save you nearly a thousand dollars each year in some cases.
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