A guide to home insurance excess

Ever wondered what the term ‘excess’ means on home insurance policies? Or how much yours should be? This is our guide to what you need to know.

Written by

Anna McEntee

Insurance comparison expert

Reviewed by

Rebecca Goodman

Insurance expert

Last Updated

16 MARCH 2022

3 min read

What does ‘excess’ mean on home insurance policies?

On home insurance policies, you’ll usually see mention of the term ‘excess’. This is the amount you pay towards a claim before your insurance provider makes its contribution. It’s not just home insurance policies either, you may find an excess on other insurance such as car insurance and travel insurance.

What’s the difference between compulsory and voluntary excess?

There are two types of excess:

Compulsory excess is set by your insurance provider. Not every policy will have a compulsory excess, but most do.
Voluntary excess is agreed between you and your insurance provider. When you buy cover, you’ll usually have the option of paying a higher excess if you were to make a claim.

Why might you want to pay a higher voluntary excess? Well, having a higher excess could mean you pay a lower premium (be that monthly or annually) as you’d be paying more towards any claim you make.

Clearly there’s a balance to be struck. On one hand, increasing your excess will save you money on your premium. But on the other, you don’t want to be landed with an excess you can’t afford to pay. A high excess saves you money only if you don’t make a claim. So weigh it up carefully.

If you make a claim, your insurance provider will deduct both types of excess from the amount it pays you, or you’ll have to pay the total of the excess to any repairer or supplier – for example your builder.

It’s a nifty trick for saving money on your premiums, although there are lots of clever ways to save on home insurance. Just make sure that whatever the excess is, you’ll be able to hand that money over if you need to.

What will the excess on my home insurance be?

There are two types of home insurance: buildings insurance and contents insurance. The excess on these can be quite different, depending on the level of risk.

Different parts of your policy may have different levels of excess. For accidental damage, the compulsory excess could be around £50 and the voluntary excess could be £250. So in the event of a claim you’d pay £300.

Claims that are typically expensive, such as subsidence, usually attract a higher compulsory excess. In this case, the compulsory excess could be £1,000 with a voluntary excess of £250, meaning you’d have to pay out £1,250 to make a claim.

Claims for an “escape of water” often carry a higher compulsory excess too. This is usually around £250. So if you have a water leak that damages your property and your voluntary excess is £250, you’d pay £500 towards the claim.

If you’ve got both buildings and contents cover, some insurance providers may charge only one excess on something that damages both your home and contents. Others may want you to pay the excesses on both. Make sure you understand what’s required by your policy before you buy.

All of these details will be listed in your insurance policy documents. So while it’s not the most exciting life admin task, it’s worth taking a look so you’re aware how much you’ve agreed to pay.

Some providers offer excess protection cover – where you pay an additional premium to cover any excess you have to pay up to a certain limit.

What do I need to know about compulsory and voluntary excess?

It’s important you understand compulsory excess and agree on a sensible level of voluntary excess to make sure you can afford the combined total. You can adjust your excess when you compare quotes with us to see how it affects your premium and assess whether any potential saving is worth the risk of having to pay that much if you need to make a claim.

Don’t forget that the world of home insurance is very competitive, so you can take your pick of policies. This means you don't need to go with a policy with a high excess if you’d prefer a smaller one. And it’s not the only thing to look at either - the price is important but making sure you have a policy that suits your needs should be the priority.