Car insurance excess explained

It’s worrying enough to be in a car accident without then finding that you can’t afford your excess. Here’s our guide to what you’ll have to pay if you claim on your car insurance.

It’s worrying enough to be in a car accident without then finding that you can’t afford your excess. Here’s our guide to what you’ll have to pay if you claim on your car insurance.

Rebecca Goodman
Insurance expert
5
minute read
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Last Updated 18 AUGUST 2022

What is car insurance excess?

Your excess is the amount you’ll have to pay towards any claim you make on your insurance. The total is likely to consist of a compulsory and a voluntary excess.

Say 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.

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.
  • Voluntary excess – this is how much you choose to pay on top of the compulsory excess.

Some policies may have an extra compulsory excess. For example, if you’re under 25, you may need to pay a 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. 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 is usually waived. Check your policy as this can vary.

Before you buy any 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, 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? 

Your insurance provider decides your compulsory excess, meaning you have no control over it. How much you pay will vary – your insurance provider will consider your age, experience and the car you drive and decide what risk you pose.

The voluntary excess works differently.  It’s more flexible and allows you to choose how much you’re willing to pay, within a range.

Should I increase my voluntary excess?

If you consider yourself a safe driver, it may be worth paying a higher voluntary excess to reduce your premiums. But make sure you can afford to pay both your 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 is excess insurance? 

Excess insurance covers the cost of your 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 will mean you can get that £250 back.

Before taking out a policy, you’ll need to agree an upper limit with your insurance provider. You should set this to the same amount as your excess.

How many times you can claim on your excess insurance will depend on your policy. Some insurance providers limit how many times you can claim, while others limit how much you can claim for.

Excess insurance could save you money in the long run, but be sure to read the small print so you know exactly what you’re covered for and how much it’ll cost.

What types of excess insurance are there?

There are two main types of excess insurance policy:

  • Excess insurance for a single policy - this covers the excess for one policy, such as your car insurance.
  • Lifestyle excess insurance - this covers the excesses for all your insurance policies. 

You can’t currently compare excess insurance through Compare the Market, but your insurance provider may let you add it to your policy for an extra cost.

What doesn’t excess insurance cover?

Exclusions vary between policies and insurance providers. That’s why you need to read your policy carefully before committing. This could save you a lot of time, hassle and money in the long run.

You may find there are certain restrictions, such as a deferral period before you can claim, or a cap on how much you can claim for.

Should I take out excess 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 shouldn’t need excess insurance.

If you’d struggle to afford your compulsory 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.

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.

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

Yes, you’ll have to pay the excess, but the other driver’s insurance provider should refund you.

Be warned though, this could take time, and you may need to claim the excess back yourself from the at-fault driver’s insurance provider. This is where having legal protection as part of your car insurance could help.

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. 

Will my excess increase if I make a claim?

If you make a claim, your insurance provider may consider you a higher risk, and set a higher compulsory excess when you renew your policy.

What happens if I can’t afford to pay the excess?

If you can’t pay the excess, your insurance provider may refuse to pay out. That’s why you should always check the excess before taking out any insurance policy.

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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Compare quotes with us today and see if you can start saving. 

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