What is Excess in Car Insurance?
When you are looking through your car insurance policy, you’ve probably come across something called “excess.” Excess is an important part of how insurance works, but many people don’t fully understand what it means or when it applies. So, in this guide, we will break it down. Once you’ve read through this, it’s a good idea to compare car insurance quotes to see which providers offer the best excess terms. Let’s begin with what excess is.
In short, excess is the amount of money you agree to pay towards a claim. Your insurer covers the rest (up to your policy limit). For example, if your total repair bill is £1,500 and your excess is £250, your insurer pays £1,250 and you pay the £250 excess.
Key points
- Excess is made up of two parts: compulsory (set by your insurer) and voluntary (set by you).
- Higher excess means lower premiums: Choosing a higher voluntary excess can lower your premium, but be sure it’s affordable in case you need to make a claim.
- Excess insurance: You can take out excess protection insurance to get your excess reimbursed after a claim.
- Applies to most claims: Even if you’re not at fault (though it might be recoverable).
What Is Compulsory Excess on Car Insurance?
Compulsory excess is set by your insurer and is non-negotiable. It’s based on your individual risk profile, including factors such as age, driving experience, claim history, and the type of vehicle you drive.
Some common examples:
- Young drivers often have a higher compulsory excess.
- High-performance or luxury vehicles may also come with higher compulsory excess amounts.
This part of the excess is always paid if you make a claim, no matter what voluntary excess you choose.
What Is Voluntary Excess in Car Insurance?
Voluntary excess is the extra amount you choose to pay on top of your compulsory excess. When setting up your policy, you can often select a voluntary excess to help reduce your premium.
- Higher voluntary excess = lower premium
- Lower voluntary excess = higher premium
It’s a balancing act. Whilst choosing a higher voluntary excess can make your insurance cheaper, make sure it’s still an amount you’d be comfortable paying if you need to make a claim.
When Do I Pay Excess on Car Insurance?
You usually pay your total excess (compulsory + voluntary) when you make a claim on your policy, especially if it’s your fault or no other party can be held responsible.
Here’s how it works:
- Fault claim: You’ll pay your full excess amount.
- Non-fault claim: You may still have to pay, but your insurer will try to recover it from the other party.
- Windscreen or minor damage claims: Some policies have separate, smaller excesses for this.
Always check your policy documents for details, as excess amounts and terms can vary.
Also worth knowing: you can insure your excess too. Some insurers offer “excess protection” as an optional add-on, which means they’ll reimburse your excess after you’ve paid it, whether it’s voluntary, compulsory, or both. It’s a small extra cost that could be useful if you ever need to make a large claim.
Can I choose both my compulsory and voluntary excess?
No. You can only choose your voluntary excess. The compulsory excess is set by your insurer and can’t be changed.
Will a higher excess always mean cheaper insurance?
Usually, yes, but the savings may not be huge. Always balance the savings with how much you can realistically afford to pay if you need to claim.
Is there an excess for windscreen repairs?
Many policies include a separate windscreen excess, which is often lower than your standard excess.
Can I avoid paying excess altogether?
Not usually. However, some insurers offer “excess protection” as an add-on, which reimburses you after you pay it. Some third-party companies, away from your insurer, can also offer this.
In Summary
- Excess is the amount you contribute towards an insurance claim.
- Voluntary excess is optional and can help lower your premium.
- Compulsory excess is set by your insurer and must be paid when you claim.
- You usually pay excess when making a claim, regardless of fault.
- Some insurers offer excess protection, which reimburses your excess after a claim.
Understanding your excess can help you avoid surprises during a claim and make sure your policy truly works for you when you need it most.
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