Car insurance excess explained

Being involved in an accident is worrying enough without discovering your car insurance excess is unaffordable. Here’s our guide to what you’ll have to pay if you make a claim.

Being involved in an accident is worrying enough without discovering your car insurance excess is unaffordable. Here’s our guide to what you’ll have to pay if you make a claim.

Rebecca Goodman
Insurance expert
minute read
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Posted 29 OCTOBER 2019 Last Updated 18 NOVEMBER 2021

What is car insurance excess?

Car insurance excess is the amount you’ll have to pay towards a claim you make on your insurance. The total excess is likely to be made up of a compulsory and voluntary excess.

For example, if you have a compulsory excess of £250 and a voluntary excess of £150, you’ll have to pay £400 towards the cost of any claim you make. You’ll only normally pay your excess when the accident, damage or injury was your fault.

You can choose how much voluntary excess you want to pay. And a higher excess means you could even lower your monthly premium.

What’s the difference between voluntary and compulsory excess?

There are two main types of car insurance excess:

  • Compulsory excess - is set by your insurance provider and can’t be changed.
  • Voluntary excess - is how much you choose to pay on top of the compulsory excess.

Some policies may also have an additional compulsory excess. For example, if you’re a driver under 25, you could have an additional young driver excess because insurance providers consider you a higher risk. You might also have an additional excess if you drive a luxury or high-performance car.

Most car insurance policies also have a windscreen/glass excess. If you claim for a damaged windscreen, you may have to pay a small excess if it needs replacing. If it can be repaired, the excess is usually waived. Check your policy as this can vary.

Before you buy an insurance policy, you should be made aware of exactly when you’ll need to pay an excess and how much it will be. If you’re not happy with the figures being suggested, you’re free to pick another insurance provider. And remember loyalty rarely pays, so don’t be tied down to an unaffordable policy.

Can I change my compulsory and voluntary excess? 

Unfortunately, you have no control over the compulsory excess – your insurance provider decides it. They look at the information you’ve provided and decide what risk you pose, taking into account your age, experience and even the car you drive.

However, the voluntary excess works differently as you can choose how much you’re willing to pay, within a range. It’s more flexible and you’re free to tinker with the levels of excess before you sign on the dotted line. 

Should I increase my voluntary excess?

If you consider yourself a safe driver, paying a higher voluntary excess may reduce your premiums. However, make sure you can afford to pay the voluntary and compulsory excess, in case you do need to make a claim following an accident. There’s no point in setting a massive voluntary excess that you’ll struggle to pay if you make a claim.

When do you pay excess on car insurance?

Excess is paid on your car insurance when you first make a claim for an accident that was your fault. If you’re injured or your car was damaged because of another driver, you won’t normally need to pay the excess. But even though it’s not always paid, there’s still a chance you may have to stump up the cash so keep this in mind when agreeing to the excess amount.

What is excess insurance? 

Excess insurance is a type of insurance policy that works alongside your traditional insurance policies. It covers the cost of your excess if you need to make an insurance claim. 

For example, if you need to pay £250 excess on a car insurance claim following an accident, with excess insurance you can get that £250 back. 

You’ll need to agree an upper limit with your insurance provider before you take out the policy. It can be anything between £250 and £2,000. It’s a good idea to set it at the same amount as your car insurance excess. There’s no point setting it higher because you’ll end up paying a higher premium for a limit that you’ll never reach. 

The number of times you can claim excess insurance will depend on the policy you choose. Some insurance providers limit how many times you can claim, while some will put an overall limit on the amount you can claim for. 

While you may not want another excess to think about, this one could end up saving you money in the long run. Just make sure to read the small print so you know exactly what you’re covered for and how much it will cost.

What are the different types of excess insurance? 

There are two main types of excess insurance policy:

  • Excess insurance for a single policy. This will cover the excess for just one insurance policy. For example, for your car insurance.
  • Lifestyle excess insurance. This can cover the excesses for various insurance policies you may have. However, you can’t currently compare lifestyle excess insurance with us. 

What isn’t covered by excess insurance?

This can vary among insurance providers and individual policies. The main thing is to read your policy wording carefully before committing. It’s not a fun task but it could save you a lot of time, hassle and, most importantly, money in the long run.

You may find certain limits in place, like a deferral period before you can make a claim or a hard cap on the amount you can claim for. Make sure you take out a policy that covers you for the amount you need and when you need it.  

There’s no point taking out too much, as you’ll be paying for something you don’t need. But if you take out too little, it may not cover your excess if you do make a claim. 

You can’t currently compare excess insurance through Compare the Market, but you may be able to add this on to your policy through your provider. 

Should I take out excess insurance?

This is a decision that’s unique to your personal financial situation. To be honest, you shouldn’t be signing up for policies that you can’t afford the excess for, so you need to feel comfortable with the commitment you’re making. 

Because excess is split between compulsory and voluntary, you should only offer a voluntary excess if you’re able to pay it. Paying for additional excess insurance is an expense that you could just absorb by not offering a voluntary excess to your provider.

If you have few options, need the insurance but can’t afford the compulsory excess, then an excess insurance policy could give you the breathing space you need. Just bear in mind that an excess is only paid for when you’re making a claim, whereas the added insurance policy will require guaranteed payments. 

It’s all a matter of weighing up the pros and cons, and costs involved. It may seem like yet another payment to make, which you’ll need to do monthly, but if it saves you money in the long run it may be worth it. You could also just pop the money into an interest-paying savings account, then it’s there for you to do what you want with it. If you need to pay an excess, it’s there. If you don’t, you could spend it on something a little more fun. 

Do I still have to pay car insurance excess if the accident wasn’t my fault? 

Yes, but your insurance provider will usually claim back your excess from the other driver’s insurance provider, and it should be refunded to you if you’re found not to be at fault.  

But be warned that it could take time to get back your excess, and you may need to claim from the at-fault driver’s insurance provider. This is where legal protection could help, although you may have to pay extra for this.

In the worst-case scenario, if the other driver can’t be identified or doesn’t have insurance, you could end up having to pay the excess, regardless of whose fault the accident was. 

Making a claim may also mean your insurance provider considers you a higher risk, and you may have a higher compulsory excess when you come to renew your policy. 

How do I know how much excess I’ll have to pay?

You can check your policy documents or look online. If you still aren’t sure, call your insurance provider.

How can I find car insurance to suit me? 

Not sure where to start? Don’t worry. We’ll do the hard work for you and independently compare a variety of insurance providers to help you find the right car insurance deal.

We’ll show you policies based on price, cover, add-ons or payment terms, helping you compare policies based on your needs. 

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