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A guide to home insurance excess

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 on what you should know.

Chris King
From the Home team
minute read
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Posted 19 DECEMBER 2019

What does ‘excess’ mean on home insurance policies?

On home insurance policies, you’ll usually see mention of the term ‘excess’. Excess is the amount you pay towards a claim before your insurance provider makes its contribution.

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).

Clearly there’s a balance to be struck. On the 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.

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.

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.

For something like 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.

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

It’s important you understand compulsory excess and agree a sensible level of voluntary excess to ensure you can afford the combined total. You can adjust your excess when you compare quotes with us to see how it affects your premium.

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