Thousands of drivers get free £250 payout through little-known car insurance scheme

Thousands of have received a £250 payout totalling £11million overall through little known scheme.

The scheme is the Excess Refund Reward from which gives drivers a refund of their "excess" payments when they buy car or home through the site. When you buy car insurance - and you need this before you drive on UK roads - it’s usually sold with an excess. This is what you have to pay first before you can make a claim.

Go Compare explains that when it comes to excess, it is usually split into two parts: compulsory and voluntary. The insurer usually sets the compulsory excess while the policyholder can choose the voluntary excess. So when you make a claim, the two are added together and must be paid before a claim can be made.

With Go Compare's scheme, customers can get a £250 payment when they have to pay their excess when making a claim. So for example, if your excess is £300, Go Compare will refund you £250 of it after the claim has been settled. If your excess payment is cheaper than £250, then the entire thing will be covered by Go Compare. The £250 refund scheme covers:

• Damage to your car, if you’re at fault and have comprehensive insurance
• Claims for fire or theft
• Uninsured driver claims

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Go Compare first introduced the scheme in July 2019 with £5million being refunded to drivers since January this year. Tom Banks, car insurance expert at Go.Compare said: “Seeing that over £11 million has been refunded to our customers through this offer is amazing. The process of making a claim on an insurance policy can be a stressful one so we hope that this refund reward can help ease some of the stresses, both mentally and financially.

“Our aim is to help motorists make informed decisions when it comes to insurance, making sure they get the cover they need and help them save some money - the excess refund reward is a great example of this. It’s great to see that so many customers have been able to benefit from the scheme.”

Drivers have faced a steep rise in car insurance costs over the last few years with the rises in premiums blamed inflation as its costing insurers more to repair and replace vehicles. Recent data from Go Compare found that since the start of the year, car insurance costs rose by 2% and in the same period in 2023 - from January to September - the average cost was up 23% or £85.

Overall, costs for third-party, fire and theft (TPFT) cover were the cheapest averaging at £449 annually. The most expensive cover was third party only which cost 33% more at £599 a year.

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