What is car insurance excess?
It’s worrying enough to be in a car accident without then finding that you can’t afford your excess. Before you compare quotes, read our guide to car insurance excess to understand how much you’ll need to pay if you make a claim.
It’s worrying enough to be in a car accident without then finding that you can’t afford your excess. Before you compare quotes, read our guide to car insurance excess to understand how much you’ll need to pay if you make a claim.
What’s the definition of car insurance excess?
Car insurance excess is the amount you’ll have to pay towards any claim you make on your car insurance policy, no matter who’s to blame.
The total excess you’ll pay is agreed when you take out a car insurance policy. It’s normally a fixed amount made up of a compulsory and a voluntary excess. The compulsory excess is set by your insurance provider, but the voluntary excess is set by you, the policyholder.
The amount you choose to pay as a voluntary excess will affect the cost of your premiums. But it’s important to remember that you’ll have to pay both the compulsory and voluntary excess if you make a claim.
Why do we have car insurance excess?
It’s to deter people from making lots of low-value claims for minimal damage that would soon add up. Car insurance is essentially meant for bigger claims that you wouldn’t be able to cover yourself.
Charging an excess is also a way for insurance providers to protect against false claims and fraud. Claimants are more likely to be genuine if they’re having to foot part of the bill themselves.
How does excess work on car insurance?
If you have an accident and make a claim on your car insurance, you’ll have to pay an agreed amount of money before your insurance provider will pay the rest of the claim.
Let’s say you have an accident that causes £1,000 of damage. If you have a compulsory excess of £250 and a voluntary excess of £150, you’ll need to pay £400 towards the cost of your claim. Your insurance provider will pay out the remaining £600.
In some cases – for example, if your car is written off – the excess may instead be taken off the settlement fee you get from your insurance provider. That’s the market value of the car at the time of the accident.
For example, if your car is valued at £9,000 and you have a combined compulsory and voluntary excess of £400, you would get a settlement of £8,600 from your insurance provider.
Will raising my excess make my car insurance cheaper?
Agreeing to pay a higher voluntary excess is one way you could pay less for your car insurance. That’s because you’ll effectively be footing a larger proportion of any repair bill and cutting the costs for your insurance provider.
However, before raising your voluntary excess to get a cheaper quote, consider the following:
- You’ll need to pay both the voluntary and compulsory excess amounts if you make a claim. Make sure you can afford the total amount.
- If you can’t pay the excess, your insurance provider may refuse to pay out.
Getting a cheaper policy will be a false economy if you can’t afford to claim on it.
How much is car insurance excess?
The amount of excess you’ll be expected to pay should be set out clearly for you to see when you get a car insurance quote. It will also be explained in your policy documents.
Before you buy an insurance policy, you’ll be told when you’ll need to pay an excess and how much it will be.
If you’re not happy with the amounts suggested, choose another insurance provider.
What’s the difference between voluntary and compulsory excess?
There are two main types of car insurance excess:
Compulsory excess
This is set by your insurance provider and can’t be changed. The amount depends on the car you drive, your age and driving history, as well as any other named drivers on your policy. It also depends on whether you’ve taken out no-claims protection.
Voluntary excess
This is how much you choose to pay on top of the compulsory excess. It’s a fixed amount you agree to when you take out your policy. Typically, the higher your voluntary excess, the cheaper your premium could be.
Can I change my compulsory and voluntary excess?
You can’t change your compulsory excess as it’s decided by your insurance provider.
You can change your voluntary excess when you renew your policy or compare quotes.
If you want to change your voluntary excess during your policy term, you’ll need to contact your insurance provider. There’s no guarantee they’ll agree to this, though. If they do, your premiums will likely change too.
Types of additional excess
Some policies may charge a different or additional compulsory excess. For example:
Young drivers
If you’re under 25, you might need to pay a ‘young driver excess’ because insurance providers consider you a higher risk.
There may also be an additional excess applied to claims made by ‘inexperienced drivers’. That could apply to drivers over the age of 25 who hold a provisional licence or those who have been driving with a full licence for less than 12 months.
High-performance cars
You might have to pay a higher excess if you drive a luxury or high-performance car. This is because they can be more attractive to thieves and are typically more expensive to repair.
A sports car that can be driven at faster speeds could also have a higher risk of being involved in an accident.
Windscreen repairs
Most car insurance policies also have a windscreen/glass excess. That means if your windscreen is damaged and you make a claim, you may have to pay a small excess if it needs replacing.
If the windscreen can be repaired, the excess may be waived or reduced. Check your policy as this can vary.
Non-approved repairs
Before you take your car to be repaired, check your policy in case you need to use an approved repairer.
Although it’s your right to decide where you want your car to be repaired, if you decide to go to a mechanic or garage not approved by your provider, you might find that you don’t get the same benefits as using an approved repairer. For example, you may not be eligible for a courtesy car, or parts or repairs might not have the same guarantee.
With some insurance providers, you may be asked to pay an additional excess if you don’t use an approved repairer. This should be stated in your policy documents.
Check your policy documents carefully before deciding to use an unapproved repairer.
Driver-specific excess
If you have a named driver on your car insurance policy who’s deemed high-risk – perhaps because they’re new to driving or have points on their licence – then your policy may include a driver-specific excess. That means that you may have to pay a higher excess if you make a claim and the high-risk driver was at the wheel at the time of the accident.
What is excess protection insurance?
Excess protection insurance could cover the cost of your compulsory and voluntary excess if you need to make a claim. For example, if you’re in an accident and need to pay £250 excess on a car insurance claim, excess insurance could mean you get that £250 back.
You can buy excess insurance as a standalone policy or as an add-on to your car insurance policy. Before taking out excess insurance, you’ll need to agree an upper limit with your insurance provider. You should set this to the same amount as your excess. In general, the higher your excess, the more it will cost to protect it.
How many times you can claim on your excess insurance will depend on your policy. Some insurance providers limit the number of claims, while others limit how much you can claim for.
Should I take out excess protection insurance?
This is a personal decision that depends on your circumstances. In an ideal world, you wouldn’t sign up for an excess you can’t afford, so you shouldn’t need excess insurance.
If you think you’d struggle to afford your excess, an excess insurance policy could give you the breathing space you need. But bear in mind you’ll only need to pay an excess if you claim, whereas you’ll definitely have to pay for excess insurance.
Excess insurance could be helpful if you’re a young or new driver where the excess is high, but you’ll have to decide if it’s right for you.
An alternative is to put the money you’d spend on excess insurance into a savings account. That way it’s there if you need it.
When do you pay excess on car insurance?
You’ll need to pay the excess when you make a claim on your car insurance, no matter whose fault it was.
You might be asked to pay the excess at the start of your claim. Or the excess could be deducted from the total repair bill, in which case you’ll pay it at the end of the claims process.
If the cost of repairs is less than your excess amount, you won’t be able to make a claim on your car insurance.
If the cost of repairs is less than your excess amount, it’s probably not worth making a claim on your car insurance. And if it’s above it but not by much, it’s worth considering whether the amount you could save is worth the loss or reduction of your no claims discount.
Remember, you must always tell your insurance provider if you have an accident, regardless of whether or not you make a claim.
Do I have to pay the excess if an accident wasn’t my fault?
If you have comprehensive cover and make a claim, you’ll have to pay the excess even if the accident wasn’t your fault. However, you should be able to get a refund from the other driver’s insurance provider, if your provider was able to recover their losses in full.
Be aware, though, that proving who’s at fault for an accident isn’t always clear-cut and can take time. This is where having car insurance legal protection could help you recover your excess.
If you don’t have comprehensive cover, you’ll need to claim on the other driver’s policy for a non-fault accident. In this case, you won’t have to pay the excess.
Do I have to pay the excess if the other driver isn’t insured?
If the other driver can’t be identified or doesn’t have insurance, you may end up having to pay the excess regardless of whose fault the accident was.
However, if you have a comprehensive policy that includes an uninsured driver promise, your no claims discount will be reinstated and your excess reimbursed.
How can I compare car insurance excess?
When you get a car insurance quote with us, we’ll ask you how much voluntary excess you want to pay. 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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Get a quoteFrequently asked questions
Should I increase my voluntary excess?
If you consider yourself a safe driver, it may be worth setting a higher voluntary excess to reduce your premiums.
Just make sure you can afford to pay both the voluntary and compulsory excess if you need to make a claim. There’s no point setting a high voluntary excess you’ll struggle to pay.
What happens if I can’t afford to pay the excess?
If you can’t pay the excess, your insurance provider might refuse to pay out. Alternatively, they may deduct the excess from what they pay towards the repairs, leaving you with an outstanding bill from the garage.
Check the terms of your policy to see how your insurance provider would handle this situation.
When won’t I pay an excess?
You won’t need to pay an excess if someone else is claiming against you, or you only have third-party car insurance. This is because you only pay an excess on repairs to your own car.
Julie Daniels - Motor insurance expert
Julie is passionate about delivering a great customer experience and rewarding people for saving on their insurance through our loyalty and rewards programme. She’s spoken to the media, including outlets like Sky News and Capital FM, about car and home insurance, as well as our rewards scheme.