Car insurance excess: a quick guide
When you make a claim, you will normally have to pay some of the costs yourself. This is called the excess, and choosing the right amount can help make sure you get the best deal.
The compulsory excess
Most insurance policies will have a compulsory excess, which will vary depending on the type of claim you make. You will always have to pay this if you claim on your policy.
The compulsory excess may vary depending on:
- the type of cover you are claiming on
- the car you'd like to insure
- the insurer you choose
The voluntary excess
Many insurers will offer you a discount on your premium for agreeing to a further voluntary excess, because they will have to pay less towards the claim as a result. Generally, the higher voluntary excess you choose, the lower your premium will be.
If you choose a voluntary excess, remember you will have to pay this amount in addition to the compulsory excess for your policy.
For example, if the compulsory excess on your policy for a particular type of cover is £50, and you chose to take a voluntary excess of £100, if you make a claim on that type of cover you will be required to pay £150 total excess, not just the voluntary excess amount.
When you get a quote, an insurer will often assume a voluntary excess to calculate the premium. Offering to pay a higher voluntary excess can often lower your quote.
Restrictions on excesses
If you are a younger driver, or have a car that will cost a lot to repair, some insurers will impose a higher compulsory excess without offering you a discount.
This reflects the fact that some drivers are considered to be more likely to make a claim, or to make more expensive claims.
Key Points
Can you afford the excess?
If you choose a higher excess to reduce your premium, make sure you can afford to pay the total excess if you have to claim. Remember that you'll probably have to pay both the compulsory and voluntary excess amounts if they apply to the same type of cover.
Higher voluntary excess, lower premium
In general, if you opt to pay a higher voluntary excess your insurer is likely to offer you a lower premium. Try choosing a higher voluntary excess when you get a quote.
Younger drivers
If you've had a number of claims in the past, or are a younger driver, you might find that you have to agree to pay a higher excess without getting a discount.
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