Insurance excess in brief
- An excess is the amount you pay towards an eligible claim.
- Your policy may include both a compulsory and voluntary excess.
- These amounts can be added together.
- A higher voluntary excess may reduce your premium, but can mean more to pay if you claim.
- Different sections of the same policy can have different excesses.
What is an insurance excess?
An insurance excess is the amount you may need to contribute towards an eligible claim before the insurer pays the remaining covered amount.
The excess that applies depends on the policy, the type of claim and any voluntary excess you selected when buying the cover.
Compulsory vs voluntary excess
Compulsory excess
- Set by the insurer
- Usually cannot be removed
- May vary by claim type
- Can depend on driver, property or cover type
Voluntary excess
- Chosen by you
- Can often be adjusted
- Usually added to compulsory excess
- A higher amount may reduce the quoted premium
Your total contribution to a claim can be the compulsory excess plus any voluntary excess you selected.
Worked example
How an excess affects a claim
Policy
- Compulsory excess
- £250
- Voluntary excess
- £150
- Total excess
- £400
If the insurer agrees a covered claim worth £2,000, you may need to contribute £400 and the insurer may pay the remaining £1,600, subject to the policy terms.
£2,000 claim minus £400 total excess equals £1,600 potential insurer payment
If the value of the claim is less than or close to the excess, making a claim may not result in a meaningful payout.
When different excesses can apply
A policy can have more than one excess. The amount can vary depending on the type of claim or who is claiming.
These are examples of where a different excess can apply. Not every policy includes all of them.
- Accidental damage
- Theft
- Windscreen claims
- Escape of water
- Subsidence
- Personal belongings
- Young or inexperienced drivers
- Legal expenses
- Optional add-ons
What happens to the excess when you claim?
Step 1
Claim assessed
The insurer checks whether the event is covered under the policy.
Step 2
Applicable excess identified
The relevant compulsory and voluntary excesses are determined.
Step 3
Excess deducted or collected
Depending on the claim, the excess may be deducted from the settlement or paid separately.
Step 4
Remaining eligible amount paid
The insurer pays the remaining covered amount, subject to the policy terms and claim value.
What to check before buying
- Total excess, not just voluntary excess
- Excess for different claim types
- Young/inexperienced driver excesses
- Whether optional cover has its own excess
- Whether your excess could exceed the value of a smaller claim
- Whether you could afford the excess immediately
- Whether changing the voluntary excess materially changes the premium
Common excess mistakes
- Assuming the voluntary excess is the total excess
- Choosing a very high excess to save only a small amount on the premium
- Forgetting that some claim types have separate excesses
- Assuming the excess is always paid the same way
- Not checking whether an excess applies to optional add-ons
- Comparing insurance quotes using price alone
Insurance excess FAQs
Answers to common questions about compulsory excess, voluntary excess and what you may need to pay when you claim.