We’ve put together a guide on everything you need to know about car insurance excess, and what it means for you.
What’s car insurance excess?
A car insurance excess is the amount you pay in the event of any claim, regardless of who's to blame.
The compulsory excess will vary depending on:
- your car
- the age and experience of the drivers on your policy
- if you’ve chosen to take protected or guaranteed no claims bonus
You can also choose to add a voluntary excess which gives you more control over the cost of your insurance.
Why do we have car insurance excess?
Car insurance excesses deter people from making lots of claims for minimal damage (like a cracked door mirror).
By reducing low-value claims, it helps to keep the overall cost of insurance down for everyone.
Insurance is there for the big claims you might not be able to pay yourself.
How does car insurance excess work?
Let's say your policy has a £50 excess, and you have an accident.
The cost of the repair is £1,050, so we pay out £1,000, you pay the £50 excess, and the bill is paid in full.
If you've just had a broken door mirror, for example, and all it needs is a new lens that costs £20, then that's less than your £50 excess.
In this case, you can't claim for it - but at least the cost of repair is affordable.
The excess makes sure your insurance is there to help when you really need it. For example, to settle that £1,000 repair bill that would be more inconvenient to pay.
A lot of policies come with two types of excess - compulsory and voluntary.
What’s compulsory excess?
Compulsory excess is a fixed amount you have to pay if you need to make a claim. The amount is set by your insurer.
The figure can vary depending on driving experience, age and the type of car.
A new driver might have to pay a higher compulsory excess than a more experienced driver as they’re viewed as a higher risk.
On the other hand, expensive performance cars could carry a higher compulsory excess than a standard make and model.
What’s voluntary excess?
The voluntary excess is added to the compulsory excess - these figures together are the amount you will have to pay if you make a claim.
But as the name suggests, you can choose how much voluntary excess you want to pay.
For example, if you have a compulsory excess of £250 and you set your voluntary excess at £150, you'll pay £400 in total if you need to make a claim.
The higher your voluntary excess is, the lower your monthly payments will be.
When choosing your voluntary excess, you need to make sure that it's a price you can actually afford if you need to make a claim.
Lower excess, higher premium or higher excess, lower premium? It’s up to you.
When do you pay excess on car insurance?
You pay the excess in the event of any claim made on your insurance policy, regardless of who's to blame.
However, if it's proved the accident was the other person's fault and the full cost is recovered by their insurer, you may be able to recover this amount.
You should check what your car insurance covers you for and the excess you’ll need to pay.
