Why is the excess so high on my cheap HGV insurance policy?

When you’re looking for the right insurance to cover your heavy goods vehicles, the sheer range of options available can be dizzying, and it can be difficult to know whether or not you’re choosing the right package to suit your needs. As such, there is often a temptation to go for one of the cheaper insurance policies available. Initially, those low costs can seem like they make that insurance so much more accessible, but when the excess hits, it’s easy to start doubting your choice.

Here, we’re going to look at the pros and cons of buying cheap HGV insurance, and, amongst it, why your excess might be so high if you go with one.

The Pros of Cheap HGV Insurance

Cost Savings

The benefit that’s likely to be most immediate when choosing cheap HGV fleet insurance is how much you’re going ot save right at the beginning of purchasing a policy. The reasons these polices are cheaper is because of their lower premiums, which can make them a great choice for fledgling businesses who are working to very tight budgets. If your profit margins are slim enough, that alone can justify the price.

Immediate Affordability

The lower upfront payments that come with cheap insurance policies, typically make them a lot more accessible to all businesses. As such, if you don’t have much access to capital, or you’re simply looking to maintain your cash flow, they can certainly make do as a means to insure your business without having to take on too much of the financial brunt of bigger policies.

Can help you stay compliant

Buying insurance isn’t just something you do because it’s a prudent financial move. For most businesses operating HGVs, it’s a legal requirement. As such, cheap insurance typically does ensure that you are meeting the minimum legal requirements that you need to operate in compliance with the law. This can help you keep your business running and avoid any legal repercussions.

Get just the basic coverage you need

It can be undoubtedly difficult to navigate the HGV insurance market, and you might not be able to tell what parts of a more comprehensive insurance policy you might actually need. When you choose a cheaper policy, you’re usually covered in cases of accidents, theft, and third-party liability. That might be as much coverage as you need, as far as you’re concerned, especially if you operate in a low-risk area or industry, or you simply don’t have a lot of valuable assets to spend that much money protecting.

The Cons of Cheap HGV Insurance

High Excess Costs

While the low premiums are what makes cheap HGV insurance so readily accessible and immediately affordable, that can change when it comes time to make a claim. Your excess is the cost of the difference between the entire cost of a claim versus what your insurance is able to cover. Paying lower premiums means lower pay outs in the event of a claim, which means higher excess that you then have to pay.

Limited Coverage

As mentioned, when you get cheap Lorry insurance, then you’re likely going to be getting only the most basic coverage. This will help in some cases, but it could also mean that you are excluded from claiming against certain risks.  While you might be covered against accidents, for instance, some policies might not insure you against fire, theft, or loss of your HGV by other means. Not having insurance when you really need it can put your business in jeopardy.

There may be some hidden costs

This is not always true of cheap HGV insurance policies, but some customers have observed that they tend to be quicker to add hidden costs, such as administrative fees, surcharges for making changes to the policy, or penalties for filing claims. These costs are sometimes often added to make up the profit lost from making the policies so cheap in the first place, so you have to be sure to read the fine print of any insurance policy you sign on to.

You may end up underinsured

Because of the lower cost range covered by your insurance, as well as limited protection in some cheap HGV policies, you might find that in the event of an event, accident, or lawsuit, you’re not able to cover the costs due to being underinsured. This can pose a real financial and even legal risk to your business if you’re not able to make the pay outs to those affected by an incident that more comprehensive insurance might be able to help with. If you run a large number of tipper vehicles in a fleet then there are specialist schemes that can accommodate these .

Limited Provider Options

Cheap insurance policies are often offered by smaller or lesser-known insurance companies that may have limited financial stability or a less established reputation in the industry. This can make it challenging to find reputable providers or switch insurers if the need arises. Businesses should carefully research insurance companies and consider factors such as financial strength, customer reviews, and claims handling reputation when selecting a provider, even if they're opting for a cheaper policy.

Is cheap HGV insurance right for you?

The immediate cost savings of cheap HGV insurance are difficult for many business owners to ignore, but you have to consider the potential drawbacks and the long-term financial implications, which can include high excess costs. When you’re comparing and buying HGV insurance, you have to ensure that you’re taking into account every aspect of the policy you choose and prioritizing value over price alone particularly if a driver has previous convictions

Take the time to understand your insurance needs

Some businesses or owner-operators might find that cheapHGV insurance is what they need at the time they buy a policy, giving them just the coverage they need to be compliant and operational. Others may find its drawbacks make it simply too difficult to operate reliably and with peace of mind. Make sure that you choose the insurance policy that best suits your needs with the help of our comparisons that give you a comprehensive look into your options.

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